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COPYRIGHT DEPOSIT. 



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WM. A. WHITTICK. 



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'WITHOUT A DETERMINATION OF VALUE, JUSTICE 
IS IMPOSSIBLE" 



VALUE 



AND 

AN INVARIABLE UNIT 
OF VALUE 

AN IMPORTANT DISCOVERY IN ECONOMICS 



/ 



\VM. A. WHITTICK 



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2^? 



PHILADELPHIA 

PRINTED BY J. B. LIPPINCOTT COMPANY 
1896 



Copyright, 1896, 

BY 

Wm. A. Whittick. 



CONTENTS. 



PAGE 

Portrait of the Author Frontispiece. 

Introduction ? 

The Economists on Value 13 

The Gresham Paradoxical Law 29 

The Economic Myth of Land-Value 34 

Our Present Standard 37 

Evils of Our Present Standard 42 

Labor Standards, etc 56 

Standard but not Basis ; also Standard and Time 

Basis 64 

Denials of the Invariable Standard 70 

A Digression 74 

Monet and an Invariable Unit 76 

The Application of the Invariable Unit of 

Value 91 

The Traders of the Town of Commerce 103 

Conclusion ... 114 

A Criticism H9 

The Invariable Unit of Value under Supply 

and Demand illustrated 132 



" Of all the economic contradictions, value is that 
which, dominating the others and summing them 
up, holds, in a sense, the sceptre of society : I had 
almost said of the moral world. Until value . . . 
arrives at its constitution, thine and mine remain 
fixed arbitrarily ; the conditions of fortune are the 
effect of chance ; property rests on a precarious title ; 
everything in social economy is provisional. 

" What should social, intelligent, and free beings 
have learned from this uncertainty of value ? To 
make amicable regulation that should protect labor 
and guarantee exchange and cheapness. What a 
happy opportunity for all to make up, by honesty, 
disinterestedness, and tenderness of heart, for the 
ignorance of the objective laws of the just and the 
unjust. Instead of that, commerce has everywhere 
become, by spontaneous effort and unanimous con- 
sent, an uncertain operation, a venturesome enter- 
prise, a lottery, and often a deceitful and fraudulent 
speculation." 

(Proudhon's " System of Economical Contradic- 
tions," page 421.) 



INTRODUCTION. 



The importance of our subject cannot be 
over-estimated. 

Value has been called the corner-stone of 
economics, the fundamental idea, the domi- 
nant category of political economy, and, un- 
less it be definitely and correctly determined, 
that science in its entirety is like a house 
built upon quicksand; it has no solid, 
abiding foundations. 

Until the commerce of mankind, — until 
the product of industry can be weighed and 
balanced in the scales of justice, society in 
its true sense is impossible, and must in- 
evitably become " an organized institution 
for picking pockets," such as it is, to a 
great extent, to-day. 

The lack of equity and justice in the pro- 



8 Introduction. 

cesses of production and distribution so pain- 
fully manifest at the present time, and so 
fruitful in evil, has its source in this one fact 
more than any other, — that there is no just 
standard measure or unit of value; that which 
is used as such being simply a disturber of 
values and a tool of exploitation and injustice 
through monopoly. 

The wide interest manifested in our sub- 
ject is a remarkable fact of current literature, 
hardly a paper or a magazine with any edu- 
cational pretensions being void of some refer- 
ence to value or to its intimate relations. 

The Loco-foco party of 1836, which pro- 
tested against paper and bank-notes, has split 
into bimetallists and monometallists, and the 
war of the standards rages from Dan to Beer- 
sheba, disintegrating political parties and be- 
coming the bete noir of political saints and 
sinners. 

Honesty is inscribed on both banners, 
while with intelligence both banners would 
vanish from the field. 



Introduction. 9 

One writer, pleading for a monopolized 
gold standard, under which rascality is a fine 
art, is so enthused with the moral aspect (to 
him) of his theme of monetary aggrandize- 
ment, that he makes a national application of 
the faith that is in him, asking, " Are we a 
nation of rascals?" 

This Armageddon of ignorance continues as 
though some Joshua of political economy had 
halted the sun in its celestial course so that 
the slaughter of words might continue. 

The economists fight upon questions to de- 
cide which value must be determined. One 
seeks his unit or standard of value in gold, 
the other in silver, and both, being blind 
leaders of the blind, fall into a pit. 

The economists talk of value as vaguely 
as the red Indian talks of the Great Spirit. 
They compare values by means of a shifting 
point of comparison (worse than none) ; they 
measure values with an elastic thread ; they 
confound utility and value; they differen- 
tiate price and value; they, in one breath, 



10 Introduction. 

proclaim the ideality of value, its elusive- 
ness and mentality ; while, in the next 
breath, they talk of so many grains of this 
or that material substance as a standard of 
the ideal. 

The thing that has the purely mental at- 
tribute of value, is, to them, the thing that 
is value; and thus they render substance 
and ideal homogeneous, and a fraudulent 
standard of value is raised. 

From this point they revel in ignorance 
and inconsistency; they jump from crag to 
crag of absurdity, until upon this vertebrata 
of ignorance and misconception they string 
the fossil remains of a science under which 
the mournful sigh of labor is the song of the 
nightingale to his exploiter, — to his mur- 
derer, — for, as Proudhon wrote, " Every 
error in commutative justice is an immola- 
tion of the laborer, a transfusion of the blood 
of one man into the body of another." 

By determining value, as we shall do, 
political economy is rescued from chaos, and 



Introduction. 11 

labor throws off the thief and the murderer. 
Out of chaos comes order, out of stupidity 
reason emerges, and out of injustice springeth 
righteousness. 

The savants tell us that our problem is 
unsolvable; that an invariable standard of 
value is unattainable, — yea, inconceivable, — 
that it is the "squaring of the circle" for 
economists ; but we brush the savants aside 
and we give political economy a determina- 
tion of its " fundamental idea " value, and a 
standard measure and unit of value, invaria- 
ble for all time, perfect in its functions and 
attributes. 

A science of political economy is now pos- 
sible: we must write, anew, our economic 
literature, throwing, with here and there a 
regret, the old apologies for iniquity into the 
flames of oblivion. 

But, although we have the confidence born 
of deep conviction necessary for our treatment 
of this subject, we are not blind to the diffi- 
culties and intricacies of the subject. 



12 Introduction, 

The antagonisms of the economists may 
well be taken as indicative of the difficulty 
and transcendent importance of our subject, 
which we believe underlies all social progress, 
which, as Proudhon said, " consists in a con- 
tinuous solution of the problem of the consti- 
tution of values, or of the proportionality or 
solidarity of products." 

We ask from our readers patience and un- 
prejudiced minds. 



VALUE 

AND 

AN INVARIABLE UNIT OF VALUE. 



The Economists on Value. 

We give some definitions of value, culled 
from economic writings, with some explana- 
tory criticisms thereon. 

Adam Smith wrote as follows : " The word 
value, it is to be observed, has two different 
meanings, and sometimes expresses the utility 
of some particular object, and sometimes the 
power of purchasing other goods which the 
possession of that object conveys." 

This definition has led many economists 
astray by confounding utility with value. 
Utility is entirely distinct from value. If 
they were identical, then all useful things 
would have value, which, we all know, is not 



13 



14 Value and an 

the case. Utility helps to determine value ; 
value is, simply and solely, power in ex- 
change. We cannot conceive of value sepa- 
rate from utility ; but utility is frequently 
separate from value. The utility of a thing 
is therefore entirely distinct from its value. 
Utilities are constant, values are inconstant. 

Francis A. Walker says, " Value must be 
severely distinguished from utility," and again, 
" Value in use is utility, and nothing else." 

J. R. McCulloch also dissents from Adam 
Smith. He writes : " The value and utility of 
commodities are totally distinct qualities." 

Henry Dunning Macleod writes as follows : 
" The value of any economic quantity is any 
other economic quantity for which it can be 
exchanged." Here he confounds value with 
quantity. He should say the value of any 
economic quantity is equivalent to the value 
of any other economic quantity for which it 
can be exchanged. 

While asserting, as above, that value is an 
" economic quantity," he, elsewhere in his 



Invariable Unit of Value. 15 

voluminous writings, describes value as a 
" ratio in exchange," and also as a " desire of 
the mind," which leads him to the absurd 
conclusion that " a single object cannot have 
value." He has confounded value (power in 
exchange) with its expression " ratio in ex- 
change." But before its value is determined, 
a thing may be known, and be said, to have 
value. 

Henry Fawcett, M.A., defines value as a 
comparison of one commodity with another ; 
and, again, as a " relative expression," but 
qualifies his definition from the ideal to the 
material, by saying, that if a sack of wheat 
exchanges for a ton of coal, then " the ton of 
coal is the value of a sack of wheat." How 
a ton of coal can be a " comparison" or a 
" relative expression" logic does not say. 

This writer also differentiates price and 
value, owing to the disturbing influences of 
money upon prices. 

The above material aspect of value is in 
harmony with that of Hugo Bilgram, of 



16 Value and an 

Philadelphia, who says, " If I exchange a 
book for a dollar, the book is the value of the 
dollar, and" (he extends Fawcett's scope of 
value) " the dollar is the value of the book." 

Under this definition, the value of a thing 
is always some other thing ; and yet Bilgram 
says that a certain quantity of gold (of no 
value, per se, by his own definition) may be 
used as a standard of value. In differen- 
tiating labor and value, Mr. Bilgram says, 
" Labor is not a quantity, but an act." To 
differentiate value and quantity, we say to 
Mr. Bilgram, " Value is not a quantity, but 
an idea." 

A good illustration of the false position of 
Bilgram is afforded by Macleod in his repu- 
diation of the term currency. He writes : 
" Nothing is more common than to say that 
such an opinion or such a report is current, 
and we speak of the currency of such an 
opinion or such a report. But whoever 
dreamt of calling the opinion or the report 
itself currency ?" 



Invariable Unit of Value. 17 

So, we speak of the value of a thing, but 
whoever (outside of learned economists) 
dreams of calling the thing itself value ? 

Fawcett's illustration should read, " The 
value of a ton of coal is equal to the value of 
a sack of wheat." Bilgram's bull should read, 
" The value of the hat is one dollar, and the 
one dollar is equal to the value of the hat, and 
its equivalent values in all vendable com- 
modities." Note that we do not say the value 
of the dollar, for the reason that the dollar is 
the unit of the value scale ; is value, in fact, 
while the hat has value only. Bilgram's con- 
ception of value leads him to say, " Strictly 
speaking, a thing can have a definite value 
only at the moment at which it is exchanged 
for another thing." This implies that value 
is a momentary phenomenon ; which is 
equivalent to saying that a body has weight 
only when it is being weighed. Contrary to 
most of the conclusions of the economists, 
Bilgram arrives at the strange conclusion 
that values are constant and utilities vari- 



18 Value and an 

able. He says, "The utility of a com- 
modity is not a fixed quantity, nor has it 
an objective existence, being dependent upon 
the judgment of the individual." Proudhon, 
who adopted the terms value in use and value 
in exchange, on entirely erroneous premises, 
realized the " positive and fixed nature of 
useful value" and the " variable element" in 
"exchangeable value." It is impossible to 
conceive of the uses of any thing changing. 
It is either adaptable for such and such a pur- 
pose or not. On the other hand, estimates and 
applications of utility may widely vary. Util- 
ity is inseparable from the nature of a thing, 
and variation therefrom is inconceivable. 

J. K. Ingalls gives us a trinity of values, 
namely, value in utility, invariable; value 
in service, stable; value in exchange, vari- 
able. He also says, " Preferably to value I 
use the term ratio," the latter in line with 
Jevons and Macleod and elsewhere refuted. 

The varied estimation of utility and its 
non-identity with value, also the fact that 



Invariable Unit of Value. 19 

service does not constitute, although it may 
help to determine, value, leaves us alone with 
true value, power in exchange, incorrectly 
expressed by Ingalls as value in exchange. 

The master-mind of Proudhon did not 
clearly comprehend value. His definition 
confounds the fact of value with its expression 
when he says, " Value is the proportional 
relations of the products which constitute 
wealth." He might have more truly said 
value is expressed by the proportional rela- 
tions of the products which constitute wealth. 
Even here he would be incorrect, for wealth 
is a term which covers all that tends to the 
weal or well-being of mankind, much of 
which is not possessed of economic value. 
The simple definition, poiver in exchange, 
conveys a clear and scientific conception of 
the term value. 

Proudhon's position as to a standard of 
value is somewhat uncertain also. He says, 
" The object of our inquiry is not the stand- 
ard of value, as has been said so often and so 



20 Value and an 

foolishly, but the law which regulates the 
proportions of the various products to the 
social wealth." The law for which Proudhon 
sought, and upon which, he says, " depends 
the rise and fall of prices," is the law of supply 
and demand ; but a standard of value is im- 
peratively necessary, for how can values be 
regulated, how compared, without a point of 
comparison ? In another place he wrongly 
identifies " supply " with " useful value ;" and 
" demand" with " exchangeable value." Sup- 
ply and demand, both, have relation to, and 
always determine, exchange value ; utility is 
an element affecting demand. 

In a line with those who have based value 
upon labor, J. R. McCulloch calls real value 
the cost of any product. Cost is (like utility) 
totally distinct from value, although it is, 
always, a prominent factor in determining 
value under supply and demand. A thing 
may be very costly (in labor) and yet quite 
valueless. Misdirected labor has no right to, 
and does not, determine value. 



Invariable Unit of Value. 21 

His definition of what he calls exchange- 
able value, in contradistinction to real value, 
may be here quoted, as follows : " All com- 
modities which are in demand and which 
require any portion of voluntary labor to 
obtain them are possessed of value, — that is, 
of power or capacity of exchanging for labor 
or for other commodities." This is verbose, 
but is, briefly, power in exchange. 

J. E. Cairnes (correctly) defines value as 
" the power of commanding other things in 
exchange," and, again (incorrectly), as "the 
ratio in which commodities in open market 
are exchanged against one another." His 
first definition is expressed by his second, — 
that is, poiver is expressed in ratios. Hence 
his second definition is inaccurate. 

Henry C. Carey defines value as a measure 
of resistance in securing the goods we need, 
which is the obverse of " power in exchange," 
and a fair definition. 

He also asserts that "the value of every 
commodity, or thing, must be estimated in 



22 Value and an 

some other commodity or thing." He would 
be more scientific in saying the value of every 
commodity or thing must be estimated in the 
value of some other commodity or thing. 
Values cannot be estimated in commodities ! 

Again he says, " Labor is thus the sole 
cause of value." He mistakes the producer 
of value for its cause. Power in exchange is 
the sole cause of value. 

Again he writes : " The value of commodi- 
ties, at the time of production, is measured by 
the quantity and quality of labor required 
to produce them." A comedy of errors ! 
The quantity and quality of labor expended 
determine cost; supply and demand deter- 
mine value. Value cannot be measured by 
labor any more than mass can be measured 
by length. Quoting Francis A. Walker : " It 
is not because an article has cost labor that 
it possesses value. It is only because it can- 
not now be obtained without labor." And 
again : " Value depends wholly upon the 
relation between demand and supply." 



Invariable Unit of Value. 23 

Professor Bonamy Price makes value cover 
all utilities, and considers it synonymous with 
attachment and esteem. 

He writes: "The feeling, 'I value,' is 
always ultimately the dictator of all economic 
action. It asserts its mastery even when the 
barbarian sells his children to be slaves." 

But utility, attachment, esteem, or a feel- 
ing, do not constitute value ; all may exist 
apart from economic value. The ideality 
conveyed in the definition is its only merit, 
but, otherwise, it is not defining value. 

J. S. Mill uses value as implying value in 
exchange, which is tautological, and no defi- 
nition of value until amended to read " power 
in exchange." 

Professor Jevons calls value a ratio in ex- 
change. " Bearing in mind that value is 
only the ratio of quantities exchanged." 
This definition, followed to a logical conclu- 
sion, annihilates the value of everything, per 
se, for how can anything possess a ratio ? 
But by denning value as power in exchange, 



24 Value and an 

and the expression of that power as ratios, 
then the reductio ad absurdtmi of Jevons and 
his followers vanishes. 

Francis A. Walker, one of the clearest in- 
. terpreters of value, defines it as power in ex- 
change, and otherwise in dealing with this 
subject expresses himself admirably. 

Proudhon makes an admission which im- 
plies the ideality of value (a point we are 
most anxious to substantiate) when he says, 
" Seeing that the variability of value pro- 
ceeds not from things, but from the mind," 
etc. 

A. L. Perry calls value " a relation in 
mutual purchase." This is, again, the sub- 
stitution of the expression of value for its 
fact. A relation cannot be a value. 

Bastiat's definition, a service rendered, is 
not scientific, because many services are not 
economically valuable. 

Koscher defined it as a quality which 
makes things exchangeable. This is put- 
ting the cart before the horse; for it is 



Invariable Unit of Value. 25 

not value that makes things exchangeable, 
but exchangeability that makes things valu- 
able. 

Levasseur defines value as a relation re- 
sulting from exchange. "Relation," again, 
which may express value, but is not value. 

J. B. Say : " The valuation of an object 
is nothing more nor less than the affirmation 
that it is in a certain degree of comparative 
estimation with some other specified object." 

This definition involves the expression of 
power in exchange or value ; it does not 
define value. 

Edward Kellogg, in his " New Monetary 
System," makes value depend upon use, and 
divides it into legal and actual value. 
These terms suggest his meaning, but they 
are unscientific. Utility is not the sole de- 
terminant of value, nor can economy recog- 
nize legal values. The fact of being able to 
redeem representatives of value in actual 
value, does not constitute the representatives 
the things they represent. 



26 Value and an 

The necessity for the minutest discrimina- 
tions in terminology is manifest by the dif- 
ferences of the economists ; and by the fact, 
more and more evident to an inquiring, pro- 
gressive mind, that this vexed question of 
value must be solved before political economy 
can pretend to be an exact science. 

One of the best definitions of value ever 
outlined is that of W. L. Trenholm, in his 
work, " The People's Money." He writes : 
" Value is an abstract term expressing a re- 
lation; it does not exist in things said to 
possess it, but is imputed to them by human 
intelligence; it is not a quality of objects, 
but only an attribute with which they be- 
come invested. Value is very different from 
utility, though utility is generally, but not 
always, the basis of value. Utility is a physi- 
cal relation, whereas value is an abstract rela- 
tion. Brute animals have a conception of 
utility ; they have no conception of value. 
Value is a purely human conception. . . . 
Value being a relation, it must vary by 



Invariable Unit of Value. 27 

degrees, not by quantities ; and degrees of 
value, since value is the correlative of desire, 
must vary with the intensity of the desires 
to which they are related. But since value 
attaches only to that which, though desired, 
is as yet withheld from our possession, then 
value must vary also with the resistance to 
appropriation." 

With the exception of the objection that 
value is always expressed by, instead of being 
the expression of, relations, the above defini- 
tion is admirable, especially the admission 
that value varies by degrees and not by quan- 
tities, the degrees in turn varying with in- 
tensity of desire. 

Looking over the foregoing definitions of 
value, we find that they embody, as a rule, 
a conception of value as a mental phenom- 
enon, — an ideality, an abstraction. The posi- 
tion of those who assert the materiality of 
value is absolutely indefensible. A com- 
modity and its value are distinct entities. 
The value may constantly change with the 



28 Value and an 

freaks of the mind, while the commodity is 
invariable. 

If not entirely distinct one from the 
other, change of one would imply changes of 
both. 

A commodity is a material substance of 
an unvarying quantity and mass ; its value 
is fugitive and uncertain. 

Those, again, who define value as both 
material and ideal, concrete and abstract, are 
condemned out of their own mouths ; and 
yet that is virtually the position of those 
who, while defining value as ideal, insist 
upon some material standard of value. 

Finally, as to value, we claim that it is 
power in exchange, expressed in ratios, de- 
termined by supply and demand, ever tend- 
ing to cost of production under an efficient 
demand or to non - production under a 
non-efficient demand ; value, so determined, 
being significant of a certain difficulty of 
attainment. 

Labor, the source of all values, creates 



Invariable Unit of Value. 29 

products — some useful, some useless — which, 
under supply and demand, have such use or 
non-use determined, resulting in values and 
non-values, the former persisting in, the latter 
desisting from, production ; the former values 
tending to cost of production, i.e., labor ex- 
pended. 

Thus, it is clearly shown that value repre- 
sents a certain difficulty of attainment, and 
that this difficulty increases under certain 
conditions and diminishes under other and 
contrary conditions. 

The modifications of this difficulty of at- 
tainment can only be indicated by a scale of 
degrees ; it is impossible to conceive of any 
commodity so functioning. 

The reader must bear the foregoing in 
mind : it is very vital to our conclusions. 

The Gresham Paradoxical Law. 

Along in the '80s I wrote as follows in 
the Denver Individualist : 

" If a general advance in prices occurs 



30 Value and an 

under a gold basis, the gold dollar is called 
upon to perform two opposite functions, 
namely, to exchange for less as money, and 
for more as a commodity. Strip off the 
material incumbrance, and this difficulty 
vanishes. 

" It is this property of ' metal money' that 
creates the so-called Gresham paradox, — that 
poor money drives out good money. 

"The paradox vanishes when we under- 
stand what is poor money and what is good 
money. Ideal money, having no intrinsic 
value, is good money, and, in competition 
with iron, silver, copper, gold, or any 
commodity money, must inevitably, and 
very properly, drive them from circulation. 
Money, like humanity, is subject to the law 
of the ' survival of the fittest.' " 

In a recent work I reiterated the above 
truth, and, so far as I know, am the first writer 
who has exposed the mythical character of 
this famed economic law, — the paradox of 
Sir Thomas Gresham. 



Invariable Unit of Value. 31 

I refer to this law again because it lias 
been urged by Jevons as a reason why money 
should not be provided by private manu- 
facture, against Mr. Herbert Spencer's claim 
that it should. In other words, the paradox 
is used as a barrier against liberty, and, like 
most pleas in that direction, it is entirely 
false and baseless. The absurd waste of 
metal in coinage is pointedly shown else- 
where in these pages ; therefore, the conflict 
of old with new coins passes out of economics. 
Money, purely ideal, enters the arena and 
defies picking, culling, and garbling, — the 
melting-pot, and Gresham's unscientific law. 

While defending Mr. Spencer's aspirations 
towards liberty, and while brushing aside 
Professor Jevons's baseless objection thereto, 
we are yet compelled to remind Mr. Spencer 
that, while the private issue of money is per- 
fectly feasible and should be legitimate, the 
issue of coin-money or metal-money would 
never be advocated, under any conditions, by 
one who understood the theory of value. 



32 Value and an 

The Gresham law is, in all its bearings, an 
apt illustration of the evil of metal coinage. 
It reveals the fact that the metal is in con- 
stant antagonism to the money, interfering 
with and sometimes entirely abrogating the 
money function, in deference to its commodity 
value. The best money is that money that 
performs the money function the best and at 
the least cost. The use of a valuable metal 
as a tool of exchange is just as absurd as 
would be its use in the manufacture of 
spades and shovels and other tools of indus- 
try. 

An iron or steel shovel would always drive 
out a gold shovel ; just as a cheap money 
drives out a dear money. 

For three centuries this paradox has been 
the apologist of an absurd system of money, — 
a system in conflict with the universal law 
that the fittest survives. 

The money that runs away from its duties 
— that refuses to circulate — is, according to 
this absurdity, the best money. The soldier 



Invariable TJnit of Value. 33 

who runs away from the field of battle is, by 
this reasoning, the bravest and best soldier. 

Professors Newcomb and Mill claim that 
" the value of the dollar varies inversely as 
the scale of prices." Conflicting values of 
full and light weight coin are the foundation 
of the Gresham paradox. 

Under the invariable unit of value, money 
will never vary in value. Its significance as 
to quantities, may vary, but, as to value, it 
never can vary. 

Thus, the invariability of the value of money 
(of the value scale) destroys this paradox. 

Money should be a value, not a commodity ; 
it should not have value ; but, I reiterate, it 
should be value, and a fixed value; being 
such, its absolute uniformity renders conflict 
impossible, and the Gresham law disappears. 

If there is any one single fact which con- 
demns our entire money system, I know of 
none so potent in that direction as that cod- 
dled product of ignorance, the Gresham para- 
doxical law. 



34 Value mid an 

The Economic Myth of Land-Value. 

Jean Jacques Rousseau has said, "The 
first man having an enclosure, a plot of 
ground, who took it into his head to say, 
' This is mine,' was the real founder of civil 
society. What crimes, misery, and horror 
would have been spared mankind if some one 
had pulled away the fences, and filled in the 
ditches, crying out to his fellows, 'Beware 
of listening to this impostor ; you are lost if 
you forget that the fruits of the earth belong 
to all, and that the land belongs to no one 
person.' " 

Adam Smith said, " As soon as the land 
of any country has all become private prop- 
erty, the landlords, like all other men, love 
to reap where they never sowed, and demand 
a rent even for its natural produce." 

The relations of landlord and tenant are 
the epitome of a huge system of exploitation 
born of unjust monopoly, such as is suggested 
by the above quotations. 



Invariable Unit of Value. 35 

We assert that land has no value, and that 
a true science of political economy demon- 
strates that fact. 

Value, or exchangeability, can only origi- 
nate in labor. That which requires no effort 
to secure it, is economically valueless. 

Proudhon said, "Abolish labor, and you 
have left only articles of greater or less use- 
fulness, which, being stamped with no eco- 
nomic character, no human seal, are without 
a common measure, — that is, are logically 
unexchangeable." 

J. K. Ingalls said, " The land, not being 
movable, cannot be transferred; hence only 
possession or occupancy can be exchanged. 
Being no product of labor, it cannot be 
measured by labor or have a labor price. A 
money price is therefore fraudulent." 

Again, the economists show that values 
always tend to cost of production. The ele- 
ment of labor being eliminated, how can cost 
be determined ? To speak of the cost of pro- 
duction of land would be absurd. Therefore, 



36 Value and an 

as no other final determinant of value is pos- 
sible, we assert, as Proudhon did of labor, 
that the value of land is a figurative expres- 
sion, an anticipation of effect from cause. 

Even if land-values were legitimized by 
science, the fact remains that they are purely 
speculative, — based upon a prospective power 
of exploitation, upon values not yet pro- 
duced, and not upon existing values. There- 
fore, how absurd it is to include land-values, 
so called, in any estimate of a community's 
exchangeable wealth. 

And what becomes of the proposition of 
certain reformers to tax land-values ? 

And, again, what of the proposition, urged 
by some students of the money question, to 
make these mythical products of unjust eco- 
nomic conditions — these so-called land-val- 
ues — a basis for money issues ? 

The scheme to tax land-values reminds me 
of the observant shark, which, seeing a man 
fall overboard, concluded it would be charita- 
ble to take the poor fellow in, as the whale 



Invariable Unit of Value. 37 

took in Jonah, in order to save him from 
death by drowning. 

The grim alternative of private or govern- 
mental monopoly is offered the poor exploited 
producer ; anything to help him to secure his 
just wages, — namely, his entire product, — 
anything except to get off his back. 

Our Present Standard. 

Professor Jevons voices the chorus of the 
economists when he writes as follows : " All 
we can say, then, is that the standard unit of 
value is some entirely arbitrary weight of the 
standard metal, the exact amount of which, 
being a matter of indifference on general 
grounds, should be fixed as seems most con- 
venient in reference to the habits of nations 
or other accidental circumstances." (Italics 
mine.) 

This faulty theory of the economists may 
be called the Styx of industry leading straight 
to Hades. By adopting a weight as a stand- 
ard of value, the commodity back of the 



38 Value and an 

weight becomes king of commodities and 
autocrat of industry, as we shall clearly show 
in our next section. 

On this theory stands gold to-day, the 
vortex of a struggle that gets more intense as 
time moves on. A struggle intensified, also, 
by the demonetization of silver, which is all 
that can be said in favor of silver coinage, 
one commodity being easier monopolized than 
two. 

Our present standard of value, so called, is 
a certain weight of gold of a certain quality. 
Now, as a standard of anything must be 
homogeneous with such thing, — as a standard 
of weight must be weight, as a standard of 
length must be length, as a standard of color 
must be color, as a standard of virtue must be 
virtue, — so, a standard of value must be value. 

As our standard of to-day is simply a 
certain quantity of gold, how can it be a 
standard of value ? 

It is actually a standard of quantity and 
fineness in relation to gold, that is all. 



Invariable Unit of Value. 39 

All of the economists agree as to the im- 
perfection of this standard ; but, while hunt- 
ing for some true standard, they have apolo- 
gized for this as the best obtainable. 

In the words of Professor Laughlin 
{Forum, February, 1896), "Gold and silver 
have been used as standards in default of 
better ones," etc. 

Adam Smith wrote : " Gold and silver, 
however, like every other commodity, vary 
in their value, — are sometimes cheaper and 
sometimes dearer, sometimes of easier and 
sometimes of more difficult purchase; . . . 
so a commodity which is itself continually 
varying in its own value, can never be an 
accurate measure of the value of other com- 
modities." Adam Smith did not correctly 
apprehend value, or he would not so con- 
found the commodity with its value. A 
commodity, even if unvarying in its value, 
could not be a standard of value; it could 
only be a standard of quantity or quality. 
A further quotation from A. Smith will 



40 Value and an 

make this plain. He says, " But as a meas- 
ure of quantity, such as the natural foot, 
fathom, or handful, which is continually 
varying in its own quantity, can never be an 
accurate measure of the quantity of other 
things ; so, a commodity, which is itself con- 
tinually varying in its own value, can never 
be an accurate measure of the value of other 
commodities." Note how harmonious is the 
use of the word quantity, and how inharmo- 
nious the interjection of the word commodity 
in the foregoing. The reference to value 
should read thus, — "so, a value, which is 
itself continually varying in its own value, 
can never be an accurate measure of the 
value of other things." 

It is easy to prove that our present stand- 
ard is not a standard of value, for if, in a 
line with the theory of Jevons heretofore 
quoted, "some entirely arbitrary weight of 
the standard metal," say, 25.8 grains of 
gold, be selected as the standard of value, 
then the perfect practicability of keeping 



Invariable Unit of Value. 41 

such quantity invariable is quite manifest; 
and the fact of the value of 25.8 grains of gold 
varying would be of no consequence ; that is, 
if the weight were the standard. If, on the 
contrary, the value of 25.8 grains of gold is 
the standard of value, then the variability in 
the value of gold is most important, and we 
have an entirely different problem to deal 
with, — viz., how to arrive at .a standard of 
value that will be invariable. Therefore, 
those economists who assert that a certain 
quantity of some commodity is, or can be, a 
standard of value, while maintaining the 
impossibility of the conception of an inva- 
riable standard, are both ignorant and in- 
consistent. 

If the commodity were indeed a standard 
of value, then it would be an invariable 
standard ; for quantities can be kept con- 
stant. 

Thus it appears that our present standard 
is not a standard of value, but a standard of 
quantity and fineness (25.8 grains of gold, nine- 



42 Value and an 

tenths fine) which masquerades as a standard 
of value, to the infinite derangement of 
values and everlasting bewilderment of the 
student of political economy. 

Evils of our Present Standard. 

Our commodity standard has perpetuated 
the Mercantile or Commercial System, which 
makes money the master, and exploiter, of 
industry, instead of its servant and tool; 
affirming, as it does, that the wealth of a 
nation consists in its money, — i.e., in the 
volume of its precious metals. 

The economists reject this system theo- 
retically, but, in spite of them, it is in force 
to-day. 

Under it, the pernicious theory of the 
balance of trade has developed into a con- 
trolling influence in international commerce, 
and the money-metals, instead of being free 
from any artificial restrictions in trade, are 
the holy of holies, the apex of an inverted 
pyramid controlled by the high-priests of 



Invariable Unit of Value. 43 

the Temple of Usury. Being not only- 
money, but the basis of a huge credit system, 
the precious metals cannot leave a country 
without necessitating a contraction of credit 
and paralysis of business. 

When we consider that the available sup- 
ply of gold (silver is now out of the ques- 
tion) is hardly sufficient for the reserve re- 
quirements of the banks, it is evident that 
we are always near financial trouble. A 
slight outflow of gold creates uneasiness, a 
large, continuous drain causes a panic. For 
instance, prior to the panic of 1893, one of 
the worst this country has experienced, 
there was a steady outflow of gold, necessi- 
tating a fearful contraction of credit (esti- 
mated $800,000,000). No wonder industry 
was paralyzed ! 

The evil of gold exports, adverse ex- 
changes, born of a commodity standard, forms 
the basis of a discovery of a principle govern- 
ing such conditions. Macleod formulated it 
thus : " When exchange is against a country 



44 Value and an 

through excessive indebtedness, equilibrium 
is restored by excess of exports over imports 
or by raising the rate of interest." This 
principle, he proudly asserts, " is universally 
adopted by every bank in the world." Un- 
fortunately it is, and industry suffers eter- 
nally, because a commodity, naturally of 
little importance industrially, has usurped 
functions and privileges not rightfully be- 
longing to it. Under a proper money sys- 
tem, the export of gold would be no more detri- 
mental to a nation than the export of potatoes ; 
or, in the words of a writer in the American 
Magazine of Civics (December, 1895), "Our 
gold would simply compete with our grain 
and cotton for the foreign market. We 
should enjoy the splendid advantage of caring 
nothing for the fluctuations of gold itself ex- 
cept as they affected the price of bullion sent 
abroad, and, thereby, our foreign debts and 
trade; while, now, the flow of gold, by its 
depletion or expansion of our money volume, 
deranges, as well, all our domestic exchanges, 



Invariable Unit of Value. 45 

twenty times more important." Let us hope 
that the time will come when political econ- 
omy will seek to cure radical evils instead of 
formulating superficial treatment into prin- 
ciples. 

The Mercantile System teaches that every- 
thing must be encouraged to leave a country 
before the precious metals, and that to this 
end industry must, unhesitatingly, be sacri- 
ficed upon the altar of money. 

Its foundation is the commodity standard, 
the use of which, in exchange, keeps money 
and industry perpetually in battle array, the 
interests of the banks and of industry being 
diametrically opposed to each other instead 
of being perfectly and continuously harmo- 
nious. 

The Commercial System creates obstacles 
to the progress of national and international 
prosperity, checking, by means of tariffs and 
custom-houses, the natural trend to union of 
interests and fraternal relations, producing, 
instead, discord, jealousy, and animosity. 



46 Value and an 

The fluctuations of the commodity stand- 
ard cause the conflict between price and 
value observed by Adam Smith, J. S. Mill, 
and others, which introduces into economy 
elements of uncertainty, disintegration, and 
contradiction, leading able writers into error. 
The point is thus explained by Smith : " The 
same real price is always at the same value, 
but on account of the variations in the value 
of gold and silver the same nominal price is 
sometimes of very different values." (Italics 
mine.) Now, by real price, A. Smith means 
" the quantity of the necessaries and con- 
veniences of life which are given for it." In 
other words, real price refers to quantities of 
commodities, which he claims are " always of 
the same value." He is wrong, for value is 
not an expression of quantity, but of difficulty 
of attainment, and that constantly varies. 
Hence, if money is a true measure of value, 
contracts for the future should always be 
made in money, if it is desired to insure an 
equivalent value. 



Invariable Unit of Value. 47 

If supply and demand were the only in- 
fluences modifying prices, the apparent con- 
flict between money and values or prices and 
values would be eliminated. Price would 
then be synonymous with value, and (Mr. 
Mill to the contrary notwithstanding) even 
then there might be a general rise or a gen- 
eral fall in values. If any one commodity 
may be produced cheaper from any cause, 
and thus decline in value (as Mill admits it 
may), then other and all values may decline 
under like influences. 

This, indeed, should be the goal of indus- 
trial progress, — viz., a general decline in cost 
of production (value), facilitating the acquisi- 
tion of all that tends to the comfort and well- 
being of the producer. 

On the other hand, famine, or undue and 
baseless money issues, might intensify the 
struggle for existence by raising values uni- 
versally. 

Under present conditions, a rising market 
is deemed prolific of good and a falling mar- 



48 Value and an 

ket, of evil. But under right conditions this 
would be reversed. Here appears the ab- 
surdity of high wages and high prices. The 
true criterion of wages is purchasing power, 
consequently, under right conditions, decreased 
cost of 'production would be constantly ad- 
vancing wages. Under this natural law, 
tariffs, by increasing cost, are a perpetual 
enemy of labor. 

Under present conditions, the natural in- 
crease of wages by decreased cost of pro- 
duction is diverted from labor by a monopo- 
lized money. And the process by which this 
infamous end is accomplished is invisible, be- 
cause the fluctuation of a standard with itself 
cannot be observed. 

This invisible but persistent nianijnilation 
of the commodity standard has diverted 
from the producer his cheapened product 
and the vast general benefits flowing from 
that great principle so beautifully elaborated 
by that great economist, Adam Smith, — the 
principle of the division of labor. This prin- 



Invariable Unit of Value. 49 

ciple, under which such play is given to the 
inventive capacity of mankind, and all the 
influences tending to perfect and cheapen 
and render accessible to the producer his 
product, is diverted from labor by the monop- 
oly of money, — of the commodity standard. 

As fast as labor is eased of the burden of 
production, the burden of distribution is in- 
creased. Facility in production meets diffi- 
culty in distribution. The acquisition by 
him of his cheapened product is blocked by 
a requisition for a monopolized and restricted 
medium of exchange. 

Whichever road he takes, he falls among 
thieves. Maledicite ! 

Again, the commodity standard fails to 
guarantee, on time contracts, the exchange of 
equivalent values. By the time any such 
contract matures, the money or commodity 
in which liquidation is obligatory may have 
become more or less difficult of attainment, 
consequently injustice enters into the liqui- 
dation. Being a variable standard of pay- 



50 Value and an 

ment or settlement, it cannot insure justice in 
contracts. 

Again, the fictitious, or legal, value of the 
commodity standard renders it extremely 
sensitive to danger ; just when most needed 
in exchange it may crawl into the nooks and 
corners of banks or into the stocking of the 
miser. 

Every nation that uses a commodity stand- 
ard has been endangered by its evanishment 
or plundered by its impudence. 

It vanishes in danger, and reappears when 
the danger passes, to curse and enslave the 
many in the interests of a few. Under re- 
sumption processes, contraction of currency 
into bonds takes place, fathering perpetual 
debts upon the people and ruining merchants 
by thousands. It is in such times that 

" 111 fares the land, to hastening ills a prey, 
Where wealth increases, and where men decay." 

England, under Peel's Resumption Act of 
1820, presented the picture of congested 



Invariable Unit of Value. 51 

wealth and general poverty. The elder Peel 
said to his son, " My son, you have enriched 
your family and your class, but you have 
nearly ruined your country." In this coun- 
try from 1865 to 1879, under Resumption 
processes, a plutarchy was created with its 
capital in Wall Street and its obedient ser- 
vants in Washington. And this resumption, 
what is it ? It is simply the ignorant alle- 
giance to a commodity standard, from which, 
under more or less trying circumstances, 
both countries had escaped. 

England's progress in material well-being 
during her struggle with Napoleon, and this 
country's like progress during the war of the 
Rebellion, give the lie to the specie basis, and 
loudly affirm the vast possibilities of industry 
under ideal standards. 

Under an imperfect commodity standard a 
safe and adequate banking system is an im- 
possibility. On the one hand is the need for 
a tool of exchange, and on the other hand is 
the necessity for redemption in gold. Such 

4 



52 Value and an 

redemption cannot be adequately guaranteed, 
and it is absurd to attempt it. Values cre- 
ated by industry are monetized by bank 
credits redeemable in specie, so that every 
issue of credit, while apparently indicating 
growing industry and increasing wealth, is in 
inverse proportion to its security. 

At the zenith of apparent enterprise and 
real prosperity gold vanishes and bank 
credits are called in. People have borrowed 
credit upon a pan-commodity basis and must 
now pay in one commodity (gold). The 
pyramid of industry based on gold, propped 
by credit, topples over, and the crop sown 
by enterprise and labor is reaped by idleness. 
No banking system based upon gold can pos- 
sibly meet the demands of expanding industry, 
it can never be other than a wrecker of in- 
dustry. 

It is not wild-cat banking that we must de- 
nounce, but a wild-cat standard. 

Again, a commodity standard is a very 
expensive toy. It diverts from their natural 



Invariable Unit of Value. 53 

uses valuable metals ; and, if the use of iron 
as money by the Lacedemonians excited the 
surprise of a visiting barbarian (whose name 
I have forgotten), how much more senseless 
might well appear the wade of gold for such 
a purpose. 

Adam Smith wrote : " Money, therefore, is 
the only part of the circulating capital of a 
society of which the maintenance can occa- 
sion any diminution in their net revenue." 

Certainly, then, it would be in a line with 
true economy to discard such an expensive 
standard. 

Probably the most gigantic evil based upon 
the commodity standard is the funding 
system, which in its malevolent influence 
upon the destinies of mankind has more to 
answer for to the eternal Nemesis of wrong 
than any other evil ; we might almost say, 
than the aggregate of all other evils. 

It is passing over the nations of the earth 
like a plague, leaving abandoned homes and 
the desolation of despair in its track. It is 



54 Value and an 

an invisible chain from which escape is hope- 
less. It is ruining nations and enslaving 
mankind. It is absurd to talk of self-gov- 
ernment under a funding system. The 
following words of prophecy were written by 
Adam Smith, in 1776, in his immortal and in- 
valuable work : " The progress of the enor- 
mous debts which at present oppress, and will 
in the long run probably ruin all the great 
nations of Europe, has been pretty uniform." 
Ruin or repudiation, which? The funding 
system wipes out all frontier lines, all jmtri- 
otism, all classes but two, "the sticker and 
the stuck !" 

It seeks the guarantee of enslaved humanity 
on its investments, and encourages official ex- 
travagance and rascality. 

The fundamental causatory evil of the 
commodity standard is its monopoly. It is 
useless to deny a monoply of gold ; if it 
were not monopolized by a comparatively 
few money-kings, how could a syndicate of 
bankers agree to control exchange as was 



Invariable Unit of Value. 55 

done recently in one of those masterly (?) 
deals in bonds of the Cleveland administra- 
tion. 

This monopoly is like a devil-fish, its 
stomach in Threadneedle Street, London, its 
suckers spread over all the world, absorbing 
the fruits of industry and reducing the in- 
dustrious to pauperism. It needs constant 
new fields of exploitation, or it would die. 
It is distinctively English in origin and has 
reduced every seventh inhabitant of England 
to pauperism. It throttles industry by debt, 
and then picks its pocket. 

Its missionaries are everywhere proclaiming 
the virtue of this devil-fish of finance, shout- 
ing for honest money and making whole 
nations converts. It spreads its capital over 
the earth, encouraging industry but capturing 
the harvest. It encourages only to devour. 
It devours, and, in return, gives periodical 
panics and industrial paralysis. And the 
civilized fools of many nations struggle on 
year by year, frantically competing with one 



56 Value and an 

another to determine which can squeeze the 
most hog into the English sovereign. Oh, 
fools, when will ye get wisdom ? 

I have not exhausted the category of evils 
of a commodity standard, but this must 
suffice. 

Whatever line of economic inquiry we 
follow, the mammoth evils of our present 
money system are revealed like a veritable 
Pandora's Box. 

Labor Standards, etc. 

Realizing the great truth that labor is the 
source of all wealth, Adam Smith, Ricardo, 
Karl Marx and other economists, including 
even the great Proudhon, have concluded 
that labor is not only the producer but the 
measure of all values. 

Adam Smith says, " Labor, it must always 
be remembered, and not any particular com- 
modity or set of commodities, is the real 
measure of value, both of silver and all other 
commodities." 



Invariable Unit of Value. 57 

This proposition, as J. S. Mill observes 
truly, " whether in itself admissible or not, 
discards the idea of exchange value alto- 
gether." And yet, while not scientifically 
true, Adam Smith's proposition is a part of 
the truth, and we shall find cost of production 
or labor expended in production figuring as a 
prominent factor in the determination of 
value, and in fact, indirectly, becoming the 
ultimate measure of value. 

We say indirectly, for a labor standard of 
value is totally inadmissible in view of the 
law which asserts, with regard to all measures 
and standards, that they must be homogeneous 
with the thing measured or gauged, and that 
therefore labor only can be a standard or 
measure of labor. Another disability of 
labor, preventing its use as a measure of 
value, is that scientifically labor has no value. 

Proudhon discerned this truth when he 
wrote, " The value of labor is a figurative 
expression, an anticipation of effect from 
cause. ... It is a fiction by the same 



58 Value and an 

title as the productivity of capital. Labor 
produces, capital has value ; and when, by a 
sort of ellipsis, we say the value of labor, we 
make an enjambement, which is not at all 
contrary to the rules of language, but which 
theorists ought to guard against mistaking 
for a reality. Labor, like liberty, love, am- 
bition, genius, is a thing vague and inde- 
terminate in its nature, but qualitatively de- 
faced by its object, — that is, it becomes a 
reality through its product. When, therefore, 
we say, This man's labor is worth five francs 
per day, it is as if we should say, The daily 
product of this man is worth five francs." 

In this relation labor is analogous with 
utility. All utilities are not valuable, but 
yet value is inconceivable apart from utility. 
So all labor products are not valuable, but 
value apart from a labor product is incon- 
ceivable. 

Therefore, labor as a standard of value is 
impossible. We next encounter the product 
of labor, which passing through the crucible 



Invariable Unit of Value. 59 

of human estimation is pronounced valuable 
or non-valuable. The necessity for this re- 
fining process is beautifully expressed by 
Proudhon : 

" But society preserves itself only so far as 
it avoids solidarity with private speculations, 
and leaves every innovation absolutely to the 
risk and peril of individuals. It would take 
but a few pages to contain the list of useful 
inventions. The enterprises that have been 
carried to a successful issue may be num- 
bered. No figure could express the multi- 
tude of false ideas and imprudent ventures 
which every day are hatched in human 
brains." 

Thus it is essential that each labor product 
pass through the crucible of supply and de- 
mand, while its producer retires to await the 
verdict which shall warrant or not its con- 
tinued production. When its value is de- 
termined, we can then logically hunt for our 
standard of value. 

The advocates of a labor standard of value 



60 Value and an 

have never discovered its unit. Ricardo con- 
fessed that an invariable standard of value 
was unattainable. 

J. K. Ingalls wrote : " I know of but one 
invariable standard, and that is labor ; but 
what is its unit?" We shall show that it 
virtually is some value taken at cost of pro- 
duction. 

Various other impossible standards have 
been suggested. J. B. Say, hunting with the 
rest of the economists for a concrete standard 
of the abstract, — i.e., a commodity standard 
of value, — finally concluded that a measure 
of value was an ignis fatuus. He advocated 
the rejection of money terms (franc, etc.) ; 
the adoption of a standard of quantity and 
exchanges of quantities. He said, " When 
the law says five grammes of silver shall be 
equivalent to a franc, it is singly saying 
that a franc is five grammes of silver." 
He asks, " Why not call it five grammes of 
silver?" This proposition of Say is for a 
restricted barter, worse than barter pure and 



Invariable Unit of Value. 61 

simple. But the suggestion involved the 
perception by the economist of a great evil, 
— viz., a variable monopolized standard. He 
writes : " The whole monetary system would 
thenceforth fall to the ground, — a system re- 
plete with fraud, injustice, and robbery ; and 
moreover so complicated as rarely to be 
thoroughly understood, even by those who 
make it their profession." 

The system he justly denounces is in force 
to-day. Other economists, awake to the evils 
of our present standard, have advocated 
standards based upon and governed by sta- 
tistics and inventories — multiple and compos- 
ite commodity standards. But such schemes 
are based upon a false conception of value. 
For instance, an advocate of a multiple stand- 
ard recently wrote as follows : " Money itself 
should be kept at the commodity standard, — 
that is, so that the same money shall always 
buy the same average amount of commodi- 
ties." And again : " Good money must al- 
ways measure the same average amount of 



62 Value and an 

the commodities it is commonly used to pur- 
chase." This embodies the very common error 
that money should express unvarying quanti- 
ties, while, on the contrary, it should express 
unvarying values. If I give a promissory 
note for $500, due in ten years, and at the time 
of giving it $500 will buy five hundred bushels 
of wheat, a piano of a certain quality, or one 
thousand bushels of corn, and if by the date 
of maturity the cost of production has been 
so diminished that $500 will buy one thousand 
bushels of wheat, two pianos of the same 
quality as specified above, and two thousand 
bushels of corn, my money covers precisely the 
same value or difficulty of attainment at both 
periods mentioned. Whereas, to insist that 
my $500 shall only buy the same quantities 
ten years from now would be absolutely unjust. 

A standard embodying this injustice is the 
goal of the advocates of a multiple and other 
commodity standards of which late literature 
has so much to say. 

The significance of a standard of value 



Invariable Unit of Value. 63 

must be varying as to commodities, invariable 
as to value. 

Proudhon makes this important point very- 
clear. He says, " Suppose, then, that sud- 
denly, by a fortunate combination of efforts, 
by the division of labor by the use of some 
machine, by better management of the natural 
resources, — in short, by his industry, — Pro- 
metheus finds a way of producing in one day 
as much of a certain object as he formerly 
produced in ten, what will follow ? The 
product will change its position in the table 
of the elements of wealth ; its power of 
affinity for other products, so to speak, being 
increased, its relative value will be propor- 
tionately diminished, and, instead of being 
quoted at one hundred, it will thereafter be 
quoted only at ten. But this value will still, 
and always, be none the less accurately deter- 
mined, and it will still be labor alone which 
will fix the degree of its importance. Thus 
value varies and the law of value is unchange- 
able. Further, if value is susceptible of vari- 



64 Value and an 

ation, it is because it is governed by a law 
whose principle is essentially inconstant, — 
namely, labor measured by time." 

And yet the plan of the multiple standard 
advocate referred to is to increase or diminish 
the volume of money to counteract the most 
triumphant fact of civilization, — reduced cost 
of production, lessened difficulty of attain- 
ment. 

A standard of value must be a standard of 
difficulty of attainment; of value, not of 
quantity. It should insure for its owner a 
service equivalent to that which he has ren- 
dered. Such service can only be determined 
by value (which is the measure of service), 
not by quantity. 

A truth is here revealed which is a revolu- 
tion in political economy. 

Standard but not Basis ; also Standard 
and Time Basis. 

There are some writers who think that 
gold may be retained as the money standard, 



Invariable Unit of Value. 65 

but that the "basis privilege" should be 
abolished. In other words, they believe it 
possible to have a commodity standard of 
value independent of a commodity basis. 
Benjamin R. Tucker, editor of Liberty 
(New York), says ("Instead of a Book," 
p. 253), "Moreover there is no danger in 
a standard. The whole trouble disappears 
with the abolition of the basis privilege." 

In the first place, as we have clearly 
demonstrated, a commodity cannot be a stand- 
ard of value. Further proof of this is 
needless. Again, to say that 25.8 grains of 
gold shall be a dollar, and yet that gold, in 
that quantity, and dollars, shall not be inter- 
convertible, is to theorize idly. Intercon- 
vertibility on demand is indispensable. A 
gold standard implies a gold basis ; they are 
inseparable. Tucker, when asked, "What 
becomes of the standard or measure of value 
during suspensions of specie payment?" re- 
plied, "Nothing. It remains what it was 
before. Certain parties have refused to pay 



66 Value and an 

their debts; that's all." He is right; but 
when he advocates the repudiation of this 
basis, he should include the standard also, 
for they are inseparable. 

If he owes $100 on a standard of 25.8 
grains of gold per dollar, no matter if he 
can pay his debt in other commodities than 
gold, they must be equivalent in value to 
25.8 grains of gold, to determine which they 
must be convertible into gold on demand. 
Thus, indirectly, the basis is perpetuated 
with the standard, and we are still in the 
bonds of iniquity. Suspension of specie 
payments sets the commodity (metal) free 
from money, and the dollar then becomes 
truly a standard of value (as we shall see 
later on). The money then measures the 
fluctuations in value of the commodity of 
which it was theretofore supposed to be com- 
posed as well as of all other commodities. 
The payment of debts in money then be- 
comes as just, as their payment in an inflated 
monopolized commodity would be unjust. 



Invariable Unit of Value. 67 

The quantity standard has vanished and the 
standard of value has appeared. Under re- 
sumption of the specie basis the dollar be- 
comes an invariable unit of quantity, mas- 
querading as a unit of value. Payment of 
debts in this commodity standard is the very 
embodiment of rascality. 

Hugo Bilgram, of Philadelphia, in a 
j)amphlet on the money question, advocates 
the gold standard in connection with a 
promise to redeem in such standard on time 
notice, instead of, as now, on demand. By 
this plan the same quantity of gold may be 
used "repeatedly in the process of redemp- 
tion." But, apart from the absurdity of a 
commodity standard of value, the facts of 
history condemn his plan as impossible. 
Adam Smith tells us that along in 1762, 
1763, 1764, "the different banking com- 
panies of Scotland were in the practice of 
inserting into their bank-notes what they 
called an optional clause, by which they 
promised payment to the bearer, either as 



68 Value and an 

soon as the note should be presented, or, in 
the option of the directors, six months after 
such presentment, together with the legal 
interest for the said six months." 

Under this abuse, sometimes the exchange 
between London and Carlisle was at par, 
while that between London and Dumfries 
would be four per cent, against Dumfries, 
" though this town is not thirty miles distant 
from Carlisle." 

Uncertainty of demand redemption de- 
graded the time notes four per cent, below 
coin. 

The same writer speaks of the paper cur- 
rencies of the North American Colonies pay- 
able several years after issuance, which in 
spite of legal enactments varied in their 
value in proportion to " the distance and 
probability of the term of their final dis- 
charge and redemption." 

This all goes to show that Bilgram's 
scheme of time redemptio?i and Tucker's 
scheme of no basis are both fallacious and 



Invariable Unit of Value. 69 

impracticable ; or, to be more explicit, Tucker 
cannot have a standard of value that is not 
a basis of value ; and Bilgram cannot have a 
standard that is not redeemable on demand. 
We will also remind Mr. Bilgram that, if 
the same quantity of gold can be used over 
and over again in the process of redemption, 
logic insists on carrying the j^rocess to in- 
finity, rendering no redemption necessary. 

What we need is an enlargement of both 
the standard and basis of value, and that is 
obtained by our invariable unit, standard, 
basis, and measure of value, as we shall prove 
later on ! Under our system we arrive at a 
pan-value standard and basis. All values 
monetized upon a basis of all values, — and 
redeemable on demand in that basis, — that is 
our programme. So long as the value of a 
single commodity furnishes the standard, real 
or alleged, so long will that commodity be " 
subject to monopoly ; and even redemption of 
money in all commodities at par with some 
single specified commodity would be no pro- 



70 Value and an 

tection to industry, for, if the value of the 
standard commodity is the criterion for the 
values of other commodities, we are still left 
in the power of the monopolists of the stand- 
ard commodity. 

Reformers may well cry, " Save us from 
the friends of reform." 

Denials of the Invariable Standard. 

Charles Gide, of the University of Mont- 
pellier, France, concludes that " the attempt 
to discover a measure of value would seem to 
be an insoluble, nay, a contradictory problem, 
— a very squaring of the circle for political 
economists." He adds : " This, in truth, is 
the almost unanimous opinion of econo- 
mists." 

J. Marcet, another French economist, says, 
in his " Conversations," " There is no point 
so difficult to ascertain as a variation of value, 
because we have no fixed standard measure 
of value. Neither nature nor art furnishes 
us with a commodity whose value is incapable 



Invariable Unit of Value. 71 

of change, and such, alone, would afford us 
an accurate standard of value." 

J. B. Say wrote : Value " cannot be meas- 
ured, — that is to say, compared with any 
known and invariable measure of intensity, 
for no such measure has yet been discov- 
ered." 

J. S. Mill said, " A measure of exchange 
values therefore being impossible," etc. 

Macleod writes : " An invariable standard 
of value is impossible." 

E. L. Rector, American Journal of Poli- 
tics, November, 1894 : " There neither is nor 
can be any fixed and absolute standard of 
values." 

The economist Malthus said, " That a cor- 
rect measure of real value [he divides values 
into real and nominal] in exchange would 
be very desirable cannot be doubted, . . . 
and all that we can hope for is an approxi- 
mation to the measure which is the object of 
our search." 

Professor Bonamy Price writes : " In a 



72 Value and an 

world of daily life a universal measure of 
value does not exist." 

And, again : " There is no other standard 
for value but feeling, and feeling is, by 
its nature, disqualified for being a stand- 
ard." 

It is strange that intelligent men should be 
so obtuse. It is very evident that if a certain 
intensity of feeling could be expressed by a 
point in a scale, say X, then increase or dimi- 
nution of intensity could be easily ascer- 
tained by variations from X. Of course, 
feeling cannot be a standard of value, but an 
intensity of value denoted by the word dollar 
can be adopted as a standard by means of 
which increase or diminution of intensity of 
value may be observed. There is no con- 
ceivable thing or idea that may not find its 
invariable standard, given the possibility of 
expression. ' 

Benjamin R. Tucker (" Instead of a 
Book," p. 254) : " The claim that a standard 
of value varies, and inflicts damage by its 



Invariable Unit of Value. 73 

variations, is perfectly sound." But he thinks 
it better than nothing. 

Ricardo (Section VI.) : " When commodi- 
ties varied in relative value, it would be de- 
sirable to have the means of ascertaining 
which of them fell and which rose in value, 
and this could be effected only by comparing 
them, one after another, with some invariable 
standard measure of value, which should 
itself be subject to none of the fluctuations to 
which other commodities are exposed. Of 
such a measure it is impossible to be pos- 
sessed," etc. 

J. Laurence Laughlin, head professor of 
Political Economy, Chicago University, in 
the Forum, February, 1896 : "A perfect 
standard of value, as every economist knows, 
is unattainable." 

The foregoing quotations from leading 
writers indicate the universal failure to dis- 
cover a standard measure and unit of 
value. 

They also inferentially emphasize the im- 



74 Value and an 

portance of the discovery of an invariable 
measure of value, if it should be made. 
We have made that discovery. 

A Digression. 

Professor Laughlin, in the Forum, Feb- 
ruary, 1896, writes as follows : " A correct 
analysis of the situation, therefore, in my 
judgment, discloses the fact that the cause of 
all our monetary disturbances is not one con- 
nected with a medium of exchange, but one 
concerning the maintenance of a definite 
measure or common denominator, in which 
prices and contracts are expressed." 

How he fails to see that the " definite 
measure" or " common denominator" is other 
than a " medium of exchange," it is hard to 
determine. 

Again he writes : " Knowing the necessity 
of fixity in the standard for business pros- 
perity," etc. 

Again : " All tampering with the stand- 



Invariable Unit of Value. 75 

ard should be as much dreaded as Asiatic 
cholera." 

These are important admissions by such a 
high authority. The Professor is appealing 
for his imperfect gold standard, unaware that 
it embodies the very evils he condemns. 

His standard is a quantity standard not a 
"value standard, therefore values cannot be 
determined by its use. 

He admits that three influences are con- 
stantly modifying prices, namely, " First, an 
increase or diminution in the supply of 
money. Second, an increase or diminution in 
the demand for the money material. Third, 
an increase or diminution in the cost of pro- 
ducing the goods exchanged against money." 

The first two of these influences are inevi- 
table under a commodity standard. The 
control of the volume of money and of the 
material of money rests with the monopolists 
of the commodity standard. 

These are abnormal influences which would 
vanish under a scientific money system. 



76 Value and an 

The third influence is perfectly normal, 
and if we can discover a standard of value 
free from all but this last influence, namely, 
"The increased or diminished cost of pro- 
duction," then we shall have, what Professor 
Laughlin admits we do not now possess, a per- 
fect standard of value. In our next section we 
shall accomplish this task, and we hope the 
Professor will be among the first to recognize 
the fact. 

Money and an Invariable Unit. 

" Nolens volens, then, the measure of value 
must be sought for : logic commands it, and 
her conclusions are adverse to economists and 
socialists alike. The opinion which denies 
the existence of this measure is irrational, 
unreasonable. Say as often as you please, on 
the one hand, that political economy is a 
science of facts, and that the facts are con- 
trary to the hypothesis of a determination of 
value ; or on the other, that this troublesome 
question would not present itself in a system 



Invariable Unit of Value. 77 

of universal association which would absorb 
all antagonism, I will reply still, to the right 
and to the left : 

" 1. That, as no fact is produced which has 
not its cause, so none exists which has not its 
law, and that, if the law of exchange is not 
discovered, the fault is not with the facts, but 
with the savants. 

" 2. That, as long as man shall labor in 
order to live, and shall labor freely, justice 
will be the condition of fraternity and the 
basis of association ; now, without a deter- 
mination of value, justice is imperfect, impos- 
sible." (Proudhon, "System of Economical 
Contradictions," page 91.) 

For several years we have called attention, 
through various mediums, to the conflict ex- 
isting between money and the material of 
money. We have shown that money acted 
as a common denominator of values, being 
affected inversely by every modification of 
values. Correcting John Stuart Mill, we 
say, Values vary inversely as to quantities, 



78 Value and an 

— falling as they rise and rising as they fall. 
That, therefore, money could not be both 
numerator and denominator, — fluctuations in 
values affecting the money and the commodity 
in diametrically opposite ways. 

We have demonstrated that value is an 
abstraction, depending mainly upon a mental 
conception or estimate of utilities ; appearing, 
fluctuating, and disappearing without any 
material manifestation. And that, therefore, 
the standard of the abstract must be an ab- 
straction, and that it must indicate a fixed 
value or difficulty of attainment. It is the 
length of the stick which is the standard of 
length, and not the stick ; so the value of a 
commodity may be used to arrive at a standard 
of value ; but it must be the value, and not 
the commodity, which is the standard. 

These points involve great exactness. To 
illustrate how easily misconceptions arise, let 
us quote Professor Jevons, a clever writer. 
He says, "The expression standard unit of 
value will indeed be almost inevitably mis- 



Invariable Unit of Value. 79 

understood as implying the existence of some- 
thing of a fixed value" (last italics mine). 
He goes on to explain that fixed value is not 
implied. But it is exactly the fixed value, and 
nothing else, that should be implied by the 
term standard of value ; not something of a 
fixed value, but the fixed value itself regard- 
less of the something. Length need not be 
attached in perpetuity to any stick, nor need 
value be attached in perpetuity to any com- 
modity. But the length and the value re- 
spectively must be constant and invariable. 
Some there are who say they cannot con- 
ceive of value apart from a commodity ; but 
how wrong they are is easily proved. If 
wheat is quoted at one dollar per bushel, then 
one dollar is the value of a bushel of wheat. 
If the value drops to seventy-five cents per 
bushel, is not the change purely a change in 
value, — the commodity remaining unchanged ? 
Quantities are invariable ; their values are 
variable ; but a standard value would always 
be invariable. A standard of anything must 



80 Value and an 

be homogeneous with such thing, and conse- 
quently a material standard of ideal value is 
an unscientific conception, is impossible. 

To distinctly define this antagonism be- 
tween the material and the ideal standards, 
let us take the gold standard of to-day of 
25.8 grains of gold. If that quantity of gold 
is a standard, how can it be other than invari- 
able ? But it is said, it is not the gold, but its 
value that is the standard, and that is vari- 
able. Then you have a variable and an in- 
variable standard conjoined ; a quantity and 
a value. 

But you do not want a standard of quan- 
tity ; therefore you should reject the com- 
modity. You do want a standard of value; 
therefore you should accept the value. The 
moment you divorce your quantity from its 
value, the value must of necessity become in- 
variable. For fluctuations of value are im- 
possible when there is nothing to be in- 
fluenced by supply and demand. 

For instance, we will take accepted facts. 



Invariable Unit of Value. 81 

We will say that to-day 25.8 grains of gold 
is worth one dollar. The term dollar is a 
purely arbitrary point in a value scale. The 
dollar then represents a certain difficulty of 
attainment, as related to 25.8 grains of gold, 
at a given moment. If the difficulty is less- 
ened, that quantity of gold may then be pur- 
chased with less than one dollar ; if the 
difficulty is increased, that quantity of gold 
will be worth more than one dollar. The 
value of 25.8 grains of gold at a given time 
is our standard : the value only ; and value, 
being an abstraction, cannot fluctuate in 
itself, or in its own value. The thought is 
absurd. Hence the value, free from all 
modifying influences, becomes perfectly in- 
variable as a unit of value. 

We will now see how this harmonizes with 
a scientific conception of a money unit. A 
book published in 1805, written by Sir James 
Steuart, Bart., of Coltness, Scotland, edited by 
his son, General Sir James Steuart, Bart., con- 
tains ideas as to money worth reproducing 



82 Value and an 

here. We read : " Money, which I call of ac- 
count, is no more than an arbitrary scale of 
equal parts, invented for measuring the re- 
spective value of things vendable." 

Again : " Money of account performs the 
same office with regard to the value of 
things that degrees, minutes, seconds, etc., 
do with regard to angles, or as scales do to 
geographical maps, or to plans of any kind. 
In all these inventions there is constantly 
some denominator taken for the unit. In 
angles it is the degree, in geography it is the 
mile or league, in plans, the foot, yard, or 
toise, in money the pound, livre, florin, etc. 

" The degree has no determinate length, so 
neither has that part of the scale upon plans 
which marks the unit, the usefulness of all 
these inventions being solely confined to the 
marking of proportions." 

" Just so the unit in money can have no 
invariable determinate proportion to any 
part of value, that is to say, it cannot be 
fixed to perpetuity to any particular quan- 



Invariable Unit of Value. 83 

tity of gold, silver, or any other commodity 
whatever." 

Again : " Money, strictly and philosophi- 
cally speaking, is, as has been said, an ideal 
scale of equal parts. If it be demanded 
what ought to be the standard value of one 
part? I answer by putting another ques- 
tion. What is the standard length of a 
degree, a minute, a second ? It has none ; 
and there is no necessity of its having any 
other than what, by convention, mankind 
think fit to give it. But as soon as one part 
becomes determined in the nature of a scale, 
all the rest follow in proportion." 

"The first step being perfectly arbitrary, 
people may adjust one or more of these parts 
to a precise quantity of the precious metals ; 
and so soon as this is done, and that money 
becomes realized, as it were in gold and 
silver, then it requires a new definition : it 
then becomes the price as well as the measure 
of value." 

"It does not follow from the adjusting of 



84 Value and an 

the metals to the scale of value, that they, 
themselves, should therefore become the scale, 
as any one must readily perceive." 

" That money, therefore, which constantly 
preserves an equal value, which poises itself, 
as it were, in a just equilibrium between the 
fluctuating proportion of the value of things, 
is the only permanent and equal scale by 
which value can be measured." 

Again : " Money of account, therefore, 
cannot be fixed to any material substance, 
the value of which may vary with respect 
to other things." 

The above quoted definition of money, 
given to the world about thirty years after 
the appearance of Adam Smith's great work, 
stands alone, so far as we can ascertain after 
some research, in its clearness and origi- 
nality, but it has had no apparent influence 
in shaping financial legislation or policy. 

It grasps some very vital facts : (1) Money 
should be simply a scale of value, (2) its unit 
entirely arbitrary, (3) free from any com- 



Invariable Unit of Value. 85 

modity incumbrance, and (4) it must be 
poised " in a just equilibrium between fluc- 
tuating values." 

True scientific money {honest money, if 
you please) should be an arbitrary scale of 
value, whose unit, its fractions and multi- 
ples, should be used as a medium of ex- 
change. 

This money should be entirely valueless, 
per se, just as in vulgar fractions the de- 
nominator has no significance when the nu- 
merators vanish. 

Our numerators are the vendable values 
seeking markets ; our money their tool of 
exchange, — their common denominator. 

Money should express and measure values, 
its significance depending upon the volume of 
such values and the demand for the same, 
just as the degree of a circle depends upon the 
radius. 

The unit must denote an unvarying value 
or proportion in relation to the volume of 
values, just as the degree is constant as to the 



86 Value and an 

circumference of a circle. The unit of value 
will adapt itself to the varying proportions of 
values, but it will unvaryingly represent a 
certain difficulty of attainment in relation to 
such values. Its power as to quantities will 
vary with prices, but its power as to value 
will remain invariable. 

" Are not two sparrows sold for a farthing ?" 
A money system could be built upon this 
starting-point. If two sparrows are sold for 
a farthing, prices of all commodities whose 
values were determinable could be expressed 
in farthings. The farthing might be a myth, 
and yet from it the proportions of all wealth 
might be determined. How absurd it would 
be to attach the sparrows in perpetuity to the 
farthing ! How absurd it would be to at- 
tempt to define, in perpetuity, the length of 
a degree in an alternately expanding and 
contracting circle. If we wished to use the 
height of a certain man as a standard (say) 
of medium height, how foolish it would be 
to attach the man in perpetuity to his meas- 



Invariable Unit of Value. 87 

urement. By freeing the man, his subsequent 
growth, if any, may be ascertained by com- 4 
parison with the adopted scale. 

This absurd, this foolish thing is persisted 
in to-day in our money system. We attach 
a value in perpetuity to 25.8 grains of gold 
instead of taking the value of the gold at a 
given time, then releasing gold, and observing 
its fluctuations in value thereafter by com- 
parison with the value at said given time. 

Changes in variable things can always be 
noted by getting their exact condition at a 
given time, and using them as a standard 
from which to determine subsequent changes. 

Values of all commodities being variable, 
we can only discover variations by' taking 
their values at a given time as a fixed standard. 

A standard of value so determined is in- 
variable, because the only influences that can 
then affect prices are the normal ones of sup- 
ply and demand of commodities. 

The unit of value becomes absolutely free 
from all modifying influences. 



88 Value and an 

The invariable unit, standard, measure, and 
scale of value thus appears, measuring and ex- 
pressing values as they are determined by the 
perfectly normal, and only normal, influence of 
the supply of, and demand for, commodities. 

The rule applicable to our discovery may be 
thus stated : The value of a definite quantity 
of any vendable commodity, and its implied 
value equivalents in the whole range of vend- 
able commodities, may be expressed in a purely 
arbitrary term as a starting-point or money 
unit in a scale of values at a given moment of 
time. Fluctuations from such values subse- 
quent to the adoption of such money unit or 
value-scale to be noted by deviations therefrom. 

To apply this rule to present commercial 
conditions is a very simple process. 

We can use as our money unit the value 
of 25.8 grains of gold, which, to-day, is 
legally one dollar. We can imagine a dollar 
line running through the entire line of com- 
modities, like the equatorial line around our 
earth, because it follows, that if 25.8 grains 



Invariable Unit of Value. 89 

of gold is, at a certain time, worth one dollar, 
then a certain quantity of every vendable 
commodity is also worth one dollar. No de- 
tailed specification is necessary. We must 
take these values at a certain time, because 
they are variable in their nature. Now, hav- 
ing established our dollar line, and detaching 
our dollar from any commodity, we place it 
alongside the entire line as a common de- 
nominator of values. 

As values fluctuate from day to day, they 
rise above, or fall below, this line, but the 
dollar line never changes, the unit of value 
is invariable. 

Under our present system we attempt to 
hold the dollar to a certain quantity of gold ; 
why we should do so with one value more 
than with the thousand and one other values, 
can only be explained by an ignorant con- 
ception of money. 

If, at the time of the adoption of our unit, 
wheat be quoted at one dollar a bushel, and 
if, on the following day, wheat declines in 



90 Value and an • 

value to seventy-five cents per bushel, the 
change is at once perceived. Why should 
not the changes in the value of gold be 
equally perceptible? The invisible fluctu- 
ations of gold are constantly deranging the 
entire range of values, and yet some people say 
" the dollar never changes in value ; it is the 
values of commodities that change." But Mr. 
Giffen, an English statistician, said, " View- 
ing a long period, dynamically, it is beyond all 
question that the commodities are compara- 
tively steady, and only money changes." 

The invisible fluctuations of a monopolized 
commodity standard leave society to effect 
a comparison of values without a point of 
comparison. The " daily, hourly equity be- 
tween man and man are forever a foot-ball to 
be kicked hither and thither in the unreason- 
ing play of geology on the one hand, and 
credit on the other." 

Then is it not of the greatest importance 
that the secret mischiefs of the gold basis be 
revealed ? The one and only way to accom- 



Invariable Unit of Value. 91 

plish this is to note the changes in the value 
of gold precisely as we note the changes in 
the value of all other commodities. 

The secret of our financial chaos is the 
arbitrary and unscientific effort to determine 
value by fiat of law ; that is, by the decree that 
25.8 grains of gold shall always be one dollar. 

The separation of the scale from the com- 
modity, of the common denominator from 
the numerator, is essentially the solution of 
the money question. 

The Application of the Invariable Unit 
of Value. 

How can this unit be used as money to 
supply commerce with an adequate tool of 
exchange ? 

In the first place, it must be rendered easy 
and inexpensive to monetize all exchange- 
able wealth into these units of value. 

The amount so monetized must be deter- 
mined by business needs untrammelled by 
government hinderances. 



92 Value and an 

Gold must be republicanized ; its divine 
right to act as money must be denied, and 
it will then fall into the ranks of the com- 
modities, where its value will be determined, 
as are the values of all other commodities, by 
supply and demand. 

Bimetallism and monometallism, and all 
forms of metallism, will vanish like the 
heathen gods under the light of intelligence. 

Fiat money, and its twin absurdity, fiat 
value, will no more persist in their ridiculous 
pretensions. 

The world-wide superstition, that money 
should be based upon the bond-enslavement 
of the people, — upon public debts, — must die 
out; and the broad expanse of the ex- 
changeable products of industry shall furnish 
basis and redeemer. 

Money based upon the power of tax-ex- 
ploitation, issued by government regardless 
of business needs, is to be forever con- 
demned. 

The ridiculous and mischievous article in 



Invariable TJnit of Value. 93 

the Constitution of the United States, that 
Congress shall coin money and regulate the 
value thereof, must be erased as nonsensical, 
mischievous, and tyrannical. To coin a 
scale of value is absurd ; to decree values is 
lunacy. Ajax defying the lightning and 
Congress defying the law of value are on a 
par. 

W. Dodsworth, in a pamphlet issued by 
the "Sound Currency Committee" of the 
Reform Club of New York, entitled " Our 
Paper Currency," says, " It is scarcely pos- 
sible to conceive of a more vicious perver- 
sion of the functions of government than the 
issuing of a paper currency based upon the 
mere credit of the central power. The issue 
of a circulatory credit is distinctively a bank- 
ing function, and, as such, cannot properly 
be assumed by a government which has no 
right to assume fiduciary resj^onsibility on 
behalf of private interests." 

The invention of money arises out of the 
desire to freely and easily effect exchanges 



94 Value and an 

of values. Therefore such values should be 
the basis of and redeemer of money issued 
for such purpose. The owners of such 
values are the naturally competent issuers of 
such money, and the entire range of such 
values should furnish a choice of redemption ; 
not one or two values, monopolized and re- 
stricted in volume, robbing industry per- 
petually under legal tender laws and fiat 
values. 

Some devotees of governmental paternal- 
ism claim that our present National Bank 
system is worthy of commendation and con- 
tinuance. But the basis of the system is a 
national debt, or, as Jefferson called it, a 
" national canker," and it can only exist by 
the perpetuation of such debt. There is 
hardly a single feature of the system that 
should be tolerated by a civilized nation. 
Not debt, but exchangeable wealth should call 
money into existence ! 

In another " Sound Currency" pamphlet, 
entitled "The Currency Famine of 1893," 



Invariable Unit of Value. 95 

John De Witt Warner, after showing how 
the National Banks failed to relieve the con- 
gestion in the money market at the worst 
period of the famine, says, " The only result 
was to demonstrate the worthlessness of the 
National Banking system itself." 

The system is based upon privilege, and, 
under the plea that it furnishes a currency 
for business needs, it sells to necessity the use 
of credit founded upon debt. 

Freedom from legislative interference is 
all that is necessary to insure a proper mone- 
tary system responsive to business needs. 
Especially is this true now that a standard of 
value is discovered. 

The panic of 1893 demonstrated, in a re- 
markable way, that business interests may be 
safely left in the hands of the people, without 
any attempt at governmental protection or 
regulation. 

In the pamphlet last quoted from, John 
De Witt Warner writes : " Such was the crisis 
of 1893, a situation brought about by the 



96 Value and an 

wanton interference of government with 
business not its own ; aggravated by legis- 
lation which had to be broken before the 
people could help themselves ; relieved by- 
enterprise evading and overriding restrictive 
law, and turned into a theme for the gayety 
of nations by the grotesque exhibition thus 
afforded of how depraved was the elaborate 
bank-note currency system upon which had 
been lavished so much of thankless labor." 

Again he writes : " In this way, after the 
machinery so carefully adjusted by govern- 
ment had utterly failed to work, the business 
common sense of our people readjusted its 
finances, and in every part of the land busi- 
ness started up again, manufacture continued, 
the laborer received his hire, and the mer- 
chant disposed of his goods. In not an in- 
stance, so far as I have been able to learn, 
did any community find any trouble in the 
use of what in the absence of all restrictive 
laws would have been, and in defiance of 
them actually was, a perfectly natural bank- 



Invariable Unit of Value. 97 

note currency. The whole American people 
promptly accepted, each locality upon its 
knowledge of the conditions there, the paper 
of individuals and institutions. And as a 
result of this experience, most wide-spread 
and had under conditions least favorable to 
security other than the integrity of those 
who issued the notes and the intelligence of 
those who were asked to accept them, there 
was not a single dollar lost." 

But we do not learn by experience; we 
refuse to apply the lessons of history to our 
financial system ; and, such is the force of 
tradition, that when object-lessons galore 
point the way to reform, we stick like a fool 
to his folly and return like a dog to his 
vomit. 

The foregoing pointed testimony of Mr. 
Warner to the superiority of private over 
governmental methods is only one of legion. 
Freedom from governmental restriction and 
control appears, from abundant testimony and 
the facts of history, to be the chief essential 



98 Value and an 

to progress in any direction. If the Con- 
stitution of these United States made no 
reference to the money question, and legis- 
lation had not meddled therewith, it would 
have been solved long ago. Legislation 
is essentially stationary, while society is 
naturally evolutionary. Hence, legislation 
should be very reluctantly and sparingly 
indulged in. 

We find in Mr. Warner's pamphlet the 
primal steps to the solution of the currency 
problem, namely, issues of the credits of in- 
dividuals and institutions. 

Such issues would, naturally, be local and 
limited, being non-circulatory at any consid- 
erable distance from their points of issue. 
This inconvenience would suggest co-ope- 
ration and association in banking, in order 
that widely known credits might be obtain- 
able where and when necessary for business 
or travel. A system of Mutual Banking 
would probably evolve out of necessity, under 
which, gaining perfection with experience, 



Invariable Unit of Value. 99 

the evils of our present robber system would 
ultimately vanish and all exchangeable wealth 
easily find a tool of transfer at trifling cost. 
Until now the all-important question of value 
has been undetermined, and the suggested 
basis for money more or less fictional or 
empirical. With an invariable unit of value 
all values may be monetized to the extent of 
the needs of exchange. It may take many 
years to perfect a system of Mutual Bank- 
ing, but under freedom, difficulties are the 
sign-posts of progress, while under restric- 
tion and authority, they are the graveyards 
of progress. 

The importance of our discovery of the 
invariable unit of value is emphasized in the 
fact that, lacking such unit, even the advo- 
cates of money reform are hopelessly at sea. 
As an instance, we will refer to Henry Sey- 
mour, of the Free Currency propaganda of 
London, England. He asserted, quite re- 
cently, in a letter to the London Weekly 
Times and Echo (copied by Liberty, New 

7 



100 Value and an 

York), that the "ridiculous" proposition 
" that a commodity standard or monetary 
unit is both impossible and unnecessary" has 
" no longer any economic significance," and 
is as dead as a " door-nail." We have shown 
conclusively that a commodity (material) can- 
not be a unit of value (ideal). He also said 
" that money or credit is unthinkable apart 
from a commodity unit." If Mr. Seymour 
will take his thermometer and watch the rise 
and fall of the mercury under the influences 
of a varying temperature, he will get an exact 
analogy of the action of money under supply 
and demand. A simple scale of degrees of 
heat mark the thermometrical changes, a 
simple scale of degrees of value may be used to 
record changes in value, both scales being 
entirely disassociated from any material. 
And so, in the name of reform, the propa- 
ganda of error goes on in the mighty city of 
London, and its prophets see through a glass 
darkly. 

The free monetization, by our invariable 



Invariable Unit of Value. 101 

unit, of all values, offers emancipation from 
the evils of our present rascally money sys- 
tem. 

In the advocacy of reform, a strict ad- 
herence to the line of justice is naturally 
expected, and, in the suggestion and advocacy 
of the repudiation of a gold standard and 
basis of value, we are certainly beyond criti- 
cism. 

The history of finance, even in the short 
life of our republic, is replete with fraud and 
blunders. Credit strengthening acts changing 
currency bonds into coin bonds ; other acts 
changing coin bonds into gold bonds; the 
funding system ; artificial and conspired con- 
traction and paralysis of industry ; crafty 
demonetization of silver, and the long line of 
conspiracies of the money-power, are warrant 
enough for the change we advocate. As a fact, 
which will sooner or later be generally real- 
ized, the rascality and greed at the root of the 
world's funding system would divest general 
repudiation of the stigma of dishonesty. In- 



102 Value and an 

dustry is staggering to-day under debts of 
one hundred and fifty billions of dollars, 
which since 1873 have increased in pur- 
chasing power fully thirty per cent., repre- 
senting billions of unearned increment. 

With the steady contraction of the field of 
exploitation, and the steady decline in the 
earning capacity of capital, the time must 
come when the evil of usury will itself be 
exhausted or its victims be beyond further 
exj^loitation. 

The invariable unit, in its application, 
would ultimately kill usury (by usury we 
mean legal or illegal interest) ; but it would 
open up such vast opportunities to labor and 
capital that instead of, as now, the one being 
idle, the other depending upon taxing powers 
of corrupt governments, both would spring 
into the industrial arena, producing universal 
well-being and happiness. 



Invariable Unit of Value. 103 

The Traders of the Town of 
Commerce. 

At certain seasons there came to the market- 
town of Commerce, on the borders of Millen- 
nia, farmers and planters with loads of hay, of 
vegetables, of wheat, of corn, and of cotton ; 
miners came with coal, silver, and gold ; and 
merchants came with bread, clothing, hard- 
ware, wines, and watches. 

Farmers, planters, miners, and merchants 
gathered together in the public inn or hotel, 
and, after much handling of wares and dick- 
ering as to quantities equitable in exchange, 
finally came to trading terms. 

" A chiel amang them takin' notes" found 
that a ton of hay would exchange for a quarter 
of a ton of vegetables, ten bushels of wheat, 
twenty bushels of corn, a ton of coal, four 
ounces of silver, four pennyweights of gold, 
one hundred loaves of bread, one gallon of 
wine, or one watch. 

They had thus gathered, and bargained, 



104 Value and an 

and traded from time immemorial ; but it 
happened that on this occasion a thought of 
much moment occurred to one of the mer- 
chants, and he begged the other merchants, 
and the planters, and miners to listen to him, 
which they very willingly consented to do. 

He thus addressed them : " My friends, we 
are all producers of exchangeable wealth ; 
we desire to effect just exchanges one with 
another, but our present system is crude and 
cumbersome. 

" When one is asked what is the value of 
any commodity, he must, to reply fully, 
specify the ratios in exchange between such 
commodity and all other vendable commodi- 
ties, an almost interminable and a very tedious 
response. 

" We may obviate this indefiniteness or diffi- 
culty by inventing a value scale, or language 
of values, in this way, namely, — First ascer- 
tain the exchange relations of a number of 
commodities (and by inference all) in small 
and convenient quantities suitable as the basis 



Invariable Unit of Value. 105 

of a scale of values. For instance, from the 
proportions in exchange, already determined, 
we deduce that one-fifth of a ton of hay is the 
equivalent in exchange for one-twentieth of a 
ton of vegetables, or two bushels of wheat, or 
four bushels of corn, or one-fifth of a ton of 
coal, or four-fifths of an ounce of silver, or 
four-fifths of a pennyweight of gold, or twenty 
loaves of bread, or one-fifth of a gallon of wine, 
or one-fifth of a watch. Certain quantities 
of all other vendable commodities, whose 
values are determined, are also the equivalents 
in exchange of each of the above quantities 
at a given moment of time. Values are being 
continually modified, but, by taking the above 
values at a given moment as a standard of 
values, it is very evident that subsequent 
fluctuations may be easily determined; just 
as we may take the height of a man at a given 
time, and by it ascertain his subsequent 
growth. 

" Values, at a given moment, can be held 
invariable, just as height or quantity may 



106 Value and an 

be. Now, by choosing some arbitrary term 
by which to express the entire line, stated 
and inferred (the latter easily ascertained, 
when necessary) , of values, quoted above, and 
by holding that term constant (just as the 
scale of the thermometer is kept constant), 
and in its significance being totally unrelated 
to any special commodity, but always, and in 
perpetuity, being invariable as to value, we 
can then ascertain the fluctuations in the 
value of every commodity subsequent to the 
creation of our unit of value, just as we note 
the fluctuations of temperature by a scale of 
degrees. 

" We then cease expressing exchange rela- 
tions in quantities, substituting values there- 
for. 

" The value term may be ' the dollar of one 
hundred cents,' therefore from this time we 
will start our system by calling the value of 
each of the above specified commodities one 
dollar, leaving them perfectly free to fluc- 
tuate in value under supply and demand. 



Invariable Unit of Value. 107 

We can issue a money based upon this unit 
of value as a deferred equivalent in ex- 
change. 

" It will be necessary to have, as near as 
possible, uniform issues of these units of value, 
this tool of exchange ; therefore let us organize 
a mutual bank to be called ' The First Mu- 
tual Bank of the Invariable Unit,' with 
proper officers and directory. 

" This bank shall furnish us with engraved 
paper units, called dollars, in denominations 
suitable for business transactions ; the only 
condition necessary to secure these being the 
possession of exchangeable, unincumbered 
values. 

" No capital will be necessary, and no losses 
will be possible. 

" The expenses of management may be met 
by a charge of, say, one per cent, on all 
issues of these units, the surplus revenue, if 
any, after paying salaries and expenses, to be 
returned pro rata to the subscribers. 

" Subscribers, as a matter of self-interest, 



108 Value and an 

will agree to accept this money in all transac- 
tions with one another. 

" There will be no objection to anybody, 
subscriber or not, using this money in ex- 
change ; in fact, as the credit of our bank be- 
comes established, its money will extend its 
sphere of usefulness. 

"A merchant coming to Commerce with 
values for sale, desiring funds with which to 
make purchases, can apply to our bank and 
secure a reasonable advance, in money, on his 
goods. After disposing of his goods he can 
return the borrowed money to the bank, 
which will always be the point of final re- 
demption. 

" No money will ever be reissued by the 
bank, newly-printed notes being invariably 
issued and the old destroyed. 

" Money not reaching the bank for final 
redemption will form the circulating, active 
tool of business of the community or of so- 
ciety, constituting active demand, and, with 
supply, determining values. 



Invariable Unit of Value. 109 

" The supply of money being always, under 
this system, equal to the demand for money, 
the volume of money can never be restricted 
or monopolized so as to form, in itself, a modi- 
fying influence upon prices. 

"The supply of, and demand for, com- 
modities can thus be the only influence deter- 
mining values. 

"Money will be simply a function, a tool 
of exchange. 

" Daily statements, in full detail, of the 
transactions of the bank will be ample pro- 
tection against loss in any way. 

"The bank will be ours, subject to our 
needs, and living for the conservation of our 
best interests. 

" At this time, as we adopt our unit, prices 
are as follows, based upon the exchange re- 
lations above specified : 

HAY, VEGETABLES, WHEAT, CORN, COAL, 

per ton, per ton, per bushel, per bushel, per ton, 

$5.00. $20.00. 50 cents. 25 cents. $5.00 

SILVER, GOLD, LOAVES, WINE, WATCHES, 

per ounce, per pennyweight, per hundred, per gallon, each, 
$1.25. $.L25. $5.00. $5.00. $5.00. 



110 Value and an 

" Upon this basis we can complete our 
trading ; and should an actual transfer of 
goods be undesirable at this time, in any in- 
stance, a promise to pay or deliver in the 
future may be made in terms of our unit of 
value." 

They adopted this plan without dissension, 
its advantages being so apparent to every 
one. They organized their bank, completed 
their trading, and departed their several 
ways. 

Six months later they again sought the 
market with their wares. Changes had 
meanwhile occurred in the exchange re- 
lations of commodities. 

The season had been good for hay, and an 
abundant crop harvested, so that the farmer 
could afford to sell his product for four dol- 
lars a ton. Vegetables were also abundant, 
and could now be sold at fifteen dollars a 
ton. Wheat had not been so remunerative 
to labor, and the production of one bushel 
had involved as much labor as formerly the 



Invariable Unit of Value. Ill 

production of two bushels. Corn had not 
changed. Coal, by discoveries of new mines 
and by application of new machinery, could 
be marketed at three dollars a ton. Silver 
had been discovered in large quantities and 
was more easily mined, hence could be sold 
at one dollar an ounce. Gold had become 
scarcer, rising to two dollars a pennyweight. 
Loaves had changed with dear wheat and 
were now worth ten dollars per hundred. 
Wine was unchanged ; and watches were now 
worth ten dollars each. 

The statistician of the traders thought that 
a comparison of exchange ratios should be 
made, showing the past and present signifi- 
cation as to quantities of the invariable unit 
of value (the dollar.) 

After some simple figuring, he made out 
a comparative table, which he showed to the 
traders, saying to them, " it indicates, on the 
whole, a considerable advance in wealth and 
prosperity. It is easier to acquire our needs 
to-day than it was six months ago, and we 



112 



Value and an 



hope to see wheat and bread cheapened by 
the time we gather here again. 
" The table is as follows : 





WHEN UNIT WAS ADOPTED. 


SIX MONTHS LATER. 




Per ton, 


Unit bought, 




Unit will buy, 


Hay. . 


, . $5.00. 


\ ton. 


$4.00. 


\ ton. 


Vegetabli 


58 . $20.00. 
Per bushel, 


fa ton. 


$15.00. 


tV ton - 


Wheat . 


. 50 cts. 
Per bushel, 


2 bushels. 


$1.00. 


1 bushel. 


Corn . 


. . 25 cts. 
Per ton, 


4 bushels. 


25 cts. 


4 bushels. 


Coal . . 


. . $5.00. 
Per ounce, 


\ ton. 


$3.00. 


A ton. 


Silver . 


. . $1.25. 
Per dwt, 


f ounces. 


$1.00. 


1 ounce. 


Gold. . 


. . $1.25. 
Per 100 loaves, 


| dwt. 


$2.00. 


|dwt. 


Bread . 


. . $5.00. 
Per gallon, 


20 loaves. 


$10.00. 


10 loaves. 


Wine . 


, . $5.00. 
Each, 


\ gallon. 


$5.00. 


\ gallon. 


Watches, 


. $5.00. 


\ watch. 


$10.00. 


■fa watch. 



" The changes in values have occurred by 
purely normal influences, those termed by 
economists' ' supply and demand.' While 
commodities have fluctuated in value, in 
many cases, our unit of value is unchanged, 
being merely a mark or unit in a scale of 



Invariable Unit of Value. llo 

values absolutely beyond the range of any 
disturbing influence. 

" I repeat, while the values of our goods 
change from time to time, as more or less 
difficulty of attainment is apparent, the dol- 
lar, or unit, is invariable of necessity. Under 
this system of exchange, we have the satisfac- 
tion of knowing that when we make contracts 
with one another, paying or promising to pay 
in dollars (multiples or fractions of our unit 
of value), we always receive and give exact 
equivalents in service, be the time involved 
in the contract ever so long or short. 

" Just relations in exchange are assured, 
and under them, labor getting its just wage 
(its entire product), and the skill and in- 
ventive genius of the laborer constantly 
cheapening production and lowering values, 
we shall march on to a future of steadily 
increasing affluence and full security in its 
enjoyment." 

Hearty applause greeted his remarks, and, 
after giving three rousing cheers and a tiger 



114 Value and an 

for the invariable unit of value, the traders 
again dispersed, their hearts pervaded by a 
strong feeling of fraternity born of justice. 

Conclusion. 

If our conclusions as to value, reached in 
these pages, are correct, — and if the in- 
variable unit of value is, as we know it to be, 
a scientific fact, — then the current concep- 
tions of the economists and of the financial 
world, upon which are based, to a large ex- 
tent, the commerce of the world, as to money 
and currency, and the standards, measure, 
basis, and unit of value, are all unscientific 
and false. 

That " something is rotten in the state of 
Denmark" is very evident to any student of 
the times, and that the cause of decay is hard 
to discover, is manifested by the prevailing 
conflict of opinion as to the remedy therefor. 

Leaving selfish interests out of the in- 
fluences seeking to control new policies in 
finance, the honest inquirers for truth and jus- 



Invariable Unit of Value. 115 

tice still appear to be rudderless and com- 
passless. How could it be otherwise ? how 
could a policy governing values be agreed 
upon while value was undetermined? And 
now that value is determined, is it surprising 
that the theories built upon the wind of 
economic vagaries and superstitions should 
fall to the ground, and a new theory in har- 
mony with scientific fact be evolved ? 

The sooner we shed the skin of the old, 
false, and unscientific, and take on that of 
the new, true, and scientific, the less will be 
the difficulties of the change, and the oppo- 
position or antagonism thereto. 

Some interests will suffer, as in all refor- 
mations, but they will be those that cannot 
stand the play of justice. Tares may be 
uprooted ; the wheat will grow and develop. 

The suffering entailed by the process of 
reform will be as nothing compared to the 
misery accruing to society by the persist- 
ence in our present financial policy. It re- 
quires neither a prophet nor the son of a 



116 Value and an 

prophet to foresee revolution and disintegra- 
tion threatening these United States. 

Steadily, for years, have we been march- 
ing to the consummation predicted by that 
grandly unique prophet Abraham Lincoln, 
namely, the destruction of the Republic un- 
der the malign influences of corporations and 
the money power. Already the republic is de- 
stroyed, and the theme for aspiring millionaires 
may now well be " Plutocracy triumphant." 

Chattel slavery has been merged into wage 
slavery, and, as Horace Greely said, " by 
our iniquitous monetary system we have 
nationalized a system of oppression more re- 
fined, but none the less cruel, than the old 
system of chattel slavery." 

Honesty, honor, and manhood are sacrificed 
on the altar of greed, and the slime of ve- 
nality clings to politics from the policeman to 
the President, either by fact or by imputation, 
while mercantile morality has erected an altar 
to bounties, protection, and theft, under nu- 
merous hypocritical aliases. 



Invariable Unit of Value. 117 

A country intoxicated with the lavish 
wealth of nature, peopled by a cosmos of 
races, active, intelligent, orderly, industrious, 
being steadily devoured by the bondholder in 
a time of peace, is a sight to make angels 
weep. 

In the shadow of every obese millionaire 
stand hundreds of emaciated tramps and pau- 
pers ; " wealth increases and men decay." 

The prophets have spoken, but the devo- 
tees of Mammon have not listened. Reform 
lifts its voice upon every platform, but an 
ignorant multitude, hypnotized by rascality, 
tempted by a mess of pottage, persistently vote 
their own degradation. 

Average intelligence cannot cope with 
great problems in finance and sociology, but 
it is a most effectual barrier to the work of a 
higher intelligence. Quantity rules, regard- 
less of quality, in spite of the great fact of 
nature that the greatest forces are those that 
are invisible, and that minorities are the 
prophets of progress. 



118 Value and an 

Steadily concentrating evils, steadily grow- 
ing unrest, revolution predicted, evolution 
impeded, ultimate disintegration, are the 
signs of the times and the promises of the 
future. 

Already the blind Samson of labor clutches 
at the pillars of the Temple of Usury. Will 
you mock and rob and ridicule him until he 
tears the pillars of the temple in twain in the 
strength of his despair ? 

Carlyle once wrote : " Wait a little till the 
entire nation is in an electric state ; till your 
vital electricity, no longer healthfully neutral, 
is cut into two isolated portions of positive 
and negative (of money and hunger), and 
stands there bottled up in two-world bat- 
teries. The stirring of a child's finger brings 
the two together and then — what then ?" 

Those who know and feel that reformation 
or revolution is inevitable will join in the 
campaign of education for righteousness and 
help to avoid a hideous disintegration of so- 
ciety by timely concessions to justice. Those 



Invariable Unit of Value. 119 

who are indifferent, or who condemn agita- 
tion for financial reform, are like those who 
sleep while fire approaches to destroy them. 

" Slowly comes a hungry people 
As a lion, drawing nigher, 
Glares at one who nods and winks 
Behind a slowly dying fire." 

No foundation is deep enough, broad enough, 
to support the structure of an economic (or 
any other) lie ! 

A Criticism. 

In accentuation of the foregoing theories, I 
am led to criticise a recently issued pamphlet 
written by Professor J. Allen Smith, of 
Marietta College, entitled "The Multiple 
Money Standard," and published by "The 
American Academy of Political and Social 
Science," February, 1896. This academy 
is in world-wide repute. Its list of officials 
and Advisory Committee embraces names 
second to none in the arena of modern politi- 
cal economy. Edmund J. James, Ph.D., of 



120 Value and an 

the Chicago University, is its honored presi- 
dent. 

Prince Bismarck once said that, realizing 
the intricacies of the money problem, he had 
been led to consult the economists, only to dis- 
cover that they knew less than he did upon 
the subject. 

This represents my predicament in some 
degree, those professors whom I have con- 
sulted persisting in the deep slumber of de- 
cided opinions from which it is difficult to 
awaken them. 

While admitting the ability shown in the 
work under criticism, so general in economic 
essays where tradition is the basis of argu- 
ment and impossibilities its fundamental fea- 
ture, I shall boldly attack its vital assumptions. 

On page 2, Professor Smith writes : " They 
are right in maintaining that stability of gen- 
eral prices is essential to healthy industrial 
activity." 

This, I claim, is a denial of pr ogress ; for 
the aim of labor should be to jDroduce abun- 



Invariable Unit of Value. 121 

dantly a great variety of products, at the 
lowest possible cost ; which means that a steady 
decline of values (prices) should be constantly 
lessening the difficulty of attainment of our 
needs. 

Following is an admirable illustration of 
the evils of our present money system. 

Page 7 : "As long as men thought of 
wealth in its concrete form, there was a direct 
relation between supply and demand. The 
aggregate demand balanced the aggregate 
supply, and production was therefore regu- 
lar. But when the concrete gave way to the 
abstract conception of wealth, this direct, 
immediate relation became an indirect, medi- 
ate one. Under the old economic organiza- 
tion, the relation between the aggregate 
supply and the aggregate demand was one of 
equality, and may be expressed by the follow- 
ing equation : 

" Total supply of commodities == total demand for 
commodities. 



122 Value and an 

" Under the new organization of industry, 
the relation between supply and demand 
takes this form : 

" Total supply of commodities = total demand for 
money. 

" Total demand for commodities = total supply of 
money. 

But 

" Total demand for money>, =, <Total supply of 
money. 

" It follows, then, that 

" Total supply of commodities : total demand for 
commodities — Total demand for money: total sup- 
ply of money." 

All of which is admirable, and shows very 
clearly that the relation between supply of, 
and demand for, commodities which was 
evenly balanced under barter, has been ut- 
terly deranged by our money substitute for 
barter. It also shows that exchanges, which 
were formerly only limited by the material of 
exchange, are, under our present system, re- 
stricted by our tool of exchange. 



Invariable Unit of Value. 123 

To restore the old and normal relation, 
the demand for and supply of money must 
be equal ; to insure which the only possible 
course is to render the monetization of all 
commodities possible. Professor Smith is 
right when he says (page 9), "The solution 
of the money question clearly lies in the 
direction of a broadening of the monetary 
basis." This work, in its prior pages, has 
shown how this can be done. 

In writing of the standard of value, Pro- 
fessor Smith says (page 9), " All would agree 
that the ideal standard is one which always 
has exactly the same value ; but as to what 
is meant by always having the same value, 
there are two distinct and fundamentally 
different notions which tend, in their influ- 
ence on the practical side of the money ques- 
tion, towards widely different results. 

" The gold monometallists stand for one 
conception of a standard ; the bimetallists 
and paper money advocates for another. 
The former tell us that the ideal standard is 



124 Value and an 

one which represents the product of a con- 
stant quantity of labor ; the latter say it is a 
constant quantity of commodity." 

This gets to the root of the money ques- 
tion, which is totally misapprehended by 
Professor Smith, as by all the political econ- 
omists. 

Value being (as Professor Smith virtually 
admits) an abstraction, how can a " product 
of a constant quantity of labor," or " a con- 
stant quantity of commodity," both concrete, 
be a standard of value f When one speaks 
of the color of anything, or of its length, or 
mass, or value, it is the attribute and not the 
thing itself that is the point of reference. 
Therefore, it is not the commodity but its 
value which must furnish a standard of 
value. Here is where all the economists are 
at sea. Once let it be clearly demonstrated to 
the Professor that the concrete cannot be a 
standard of the abstract, — that a standard 
must be homogeneous with the thing it gauges, 
and the question of a standard of value is 



Invariable Unit of Value. 125 

half solved. The complete solution then fol- 
lows naturally and logically. 

Professor Smith claims that the standard 
of the gold monometallists above referred to 
results as follows : " The purchasing power of 
money would increase in the same ratio as 
the efficiency of labor." When, in relation 
to this, Professor Smith speaks of the " value 
of labor," he is unscientific, an error that a 
professor of Political Economy should avoid. 
Labor has no value ; it is the product of 
labor (and that not always) that has value ; 
the value is only ascertained by such product 
going through the crucible of supply and 
demand. 

But as to Professor Smith's assertion that, 
under gold monometallism, money would 
gain in purchasing power with efficiency of 
labor, we can only say that if such were a 
fact, and if efficiency of labor were the only 
element in reducing prices, nothing could be 
fairer. The fact is, however, that the gold 
standard, being a commodity, may, by manip- 



126 Value and an 

ulation, bring down prices independently of 
efficiency of labor, purely through monopoly. 
Given the free monetization of values at cost, 
and the payment to labor of its just wage 
(its entire product), wages would constantly 
be rising, and values (prices) be constantly 
falling under constantly increasing efficiency 
of labor, until the millennium of industry, 
when in the superabundance of wealth values 
(the eternal point of attack of labor) would 
be annihilated. 

On page 12 the Professor writes : " But 
even if we accept the cost of production theory 
of value, how do we know that the fall in 
prices has not been greater than the increased 
efficiency of labor ?" 

Under a gold standard the question is un- 
answerable, but under an ideal standard of 
value, nothing else could affect prices. 

Our invariable unit of value, being simply 
a point in a scale, valueless per se, would 
indicate with unvarying accuracy the rise of 
values through scarcity or excessive demand, 



Invariable Unit of Value. 127 

thereby suggesting and encouraging increased 
production, or the fall in values through 
abundance, lessened demand or what not (all 
legitimate influences in modifying values), 
thereby suggesting and, probably, forcing 
cessation or limitation of production until the 
proper equilibrium is restored. 

"It is evident, then, that the appreciation 
of money cannot explain all the increase in 
wages," writes Professor Smith, on page 13. 

We reply that the natural tendency of ap- 
preciated money is towards reduced money 
wages and increased purchasing power of the 
residuum wage. Under present conditions, 
to trace the influences affecting wages intelli- 
gently is impossible by reason of the invisible 
fluctuations of the variable standard. Under 
the invariable unit it will be easy to trace 

them. 

On page 19 the Professor says, " The prob- 
lem seems to be not how to continue the 
monetary system permanently, and for all 
time to come, on a gold basis, but how to 



128 Value and an 

make commodities generally the basis of the 
circulating medium. 

" There is no reason why a considerable 
number of commodities cannot be combined 
in such a way as to secure a standard of prac- 
tically uniform value." 

He states the problem fairly, but his sug- 
gestion as to a standard of value is met with 
the insuperable objection so frequently urged 
in this work. To state the problem with 
absolute correctness, we should say it is this, 
— namely, how to make all values the basis 
for circulating units of value. The remedy, 
scientifically stated, is this, — namely, the 
value of any commodity at any given mo- 
ment of time may be adopted as the standard 
of value for all values. Such a standard, 
of necessity, must be invariable, because it is 
not attached in perpetuity to any com- 
modity. 

In formulating his " multiple money stand- 
ard," the Professor finds that his standard 
"would be one that for all practical pur- 



Invariable Unit of Value. 129 

poses would correspond to a constant quantity 
of commodity." (Italics mine.) 

That is to say, his " multiple money stand- 
ard" is not a standard of value, but of quan- 
tity. A standard of value deals solely with 
values, else the term is absurd. Commodities 
(exchangeable) have values, but they are not 
values. 

The Professor would establish his standard 
by act of Congress, and provide for proper is- 
sues to replace present money (coin) . Under 
the invariable unit no such act is necessary : 
gold and silver and all metal money simply fall 
into line with the rest of the commodities, and 
can be monetized at their market value. They 
would no longer be money, but commodities. 

Nor does the invariable unit suggest a 
bureau of prices, to issue daily prices of the 
standard commodities. All commodities, all 
values, to be more exact, are unitized, and 
fluctuations are recorded automatically by 
our unit of value, no matter where or when 
they occur. 



130 Value and an 

The Professor is guilty of the gross ab- 
surdity of advocating fiat values, which with 
fiat money constitute the twin barbarisms of 
the age. He says (page 34) , " The price of 
silver and gold being fixed by the govern- 
ment," etc. 

The invariable unit rests upon no such con- 
demnatory ignorance ; under it, values are 
modified naturally and normally ; they are 
entirely beyond all abnormal influences. 

The Professor is a believer in the govern- 
ment incubator; he advocates government 
issues of money, as though that fetish knew 
the needs of business better than business 
men. He would put the control of the 
varied business of this great country into the 
hands of our domestics, the politicians, who 
never touch any interest except to blight or 
blackmail it. Let the government " mind its 
own business." It has done enough mischief 
already. 

And on page 42 Professor Smith says, 
" The circulating medium might be made 



Invariable Unit of Value. 131 

redeemable in gold alone." Then let us tell 
the professor that if he will give us control 
of that commodity, we will make slaves and 
paupers of the industrial classes, and rob 
them as effectively and imperceptibly as they 
are being robbed now. The absurdity of a 
thousand and one ways of getting into debt 
with only one way out would be perpetuated. 
There are some excellent points in the 
professor's pamphlet which show the evils of 
our present system, notably his exposure of 
the effects of a variable unit of value. We 
claim to have grounded the theory of value 
upon the rock of truth, and by so doing 
shall, sooner or later, compel all the savants 
to accept our position. In its application 
our invariable unit of value is perfect ; in its 
detail it is simple, when the fundamental fact 
of the ideality of value is absorbed by the 
student ; and the importance of the discovery 
is beyond expression. Its adoption will be 
the renaissance of industry ; labor's declara- 
tion of independence. 

9 



Illustrating the Invariable Unit of Value under Supply 
and Demand. 




I I I I IT 



"Like the poles of a battery, supply and demand are dia- 
metrically opposed to each other, and tend continually 
to mutual annihilation ; it is by their antagonism that the 
price of things is either increased or reduced to nothing. We 
wish to know, then, if it is not possible on every occasion so to 
balance or harmonize these two forces that the price of things 
always may be the expression of their true value, the expres- 
sion of justice." (Proudhon.) 

Supply and demand determine values which indicate diffi- 
culty of attainment under the invariable unit. As demand 
exceeds supply, prices advance ; as supply exceeds demand, 
prices fall. The dollar line, in fact the entire scale, is invari- 
able, indicating, in every degree, a definite difficulty of attain- 
ment. Contracts based upon this scale involve every essential 
of justice and equity. 
132 






"WITHOUT A DETERMINATION OF VALUE, JUSTICE 
IS IMPOSSIBLE" 



YALUE 



AND 

AN INVARIABLE UNIT 
OF VALUE 

AN IMPORTANT DISCOVERY IN ECONOMICS 
BY 

WM. A. WHITTICK 



PHILADELPHIA 

PEINTED BY J. B. LIPPINCOTT COMPANY 

1896 



